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  • Test 2: Section A (3 X 4 Marks 12 Marks)

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    The modified approach to accounting allows infrastructure assets like roads to be accounted for based on their condition and performance rather than depreciated over time. The normal accounting approach depreciates capital assets over their useful life. The modified accrual basis is used by governmental funds and accounts for transactions when they occur rather than when cash is received or spent, while proprietary and fiduciary funds use accrual accounting like private businesses.

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    Modified Accruals Approach Questions

    Original Title

    Modified Accruals

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    The modified approach to accounting allows infrastructure assets like roads to be accounted for based on their condition and performance rather than depreciated over time. The normal accounting approach depreciates capital assets over their useful life. The modified accrual basis is used by governmental funds and accounts for transactions when they occur rather than when cash is received or spent, while proprietary and fiduciary funds use accrual accounting like private businesses.

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    9 views1 page

    Test 2: Section A (3 X 4 Marks 12 Marks)

    Uploaded by

    gmurali_179568
    The modified approach to accounting allows infrastructure assets like roads to be accounted for based on their condition and performance rather than depreciated over time. The normal accounting approach depreciates capital assets over their useful life. The modified accrual basis is used by governmental funds and accounts for transactions when they occur rather than when cash is received or spent, while proprietary and fiduciary funds use accrual accounting like private businesses.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    TEST 2: Section A (3 x 4 marks = 12 marks)

    What is the difference between using the modified approach to accounting and normal
    accounting for Capital Assets?
    Explain the difference between the normal accounting and modified accrual bases of
    accounting. Which funds and governmental activities use each basis?

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