Governmental fund accounting uses the modified accrual basis of accounting. Under this basis, revenues are recognized when:
They are measurable (amount can be reasonably determined)
They are available (collectible within the current period or soon enough thereafter to pay current liabilities — typically within 60 days)
This is the key difference from full accrual accounting, which recognizes revenue when it is earned, regardless of when received.
Relevant References:
GASB Statement No. 33 – Accounting and Financial Reporting for Nonexchange Transactions
GASB Statement No. 34 – Fund Accounting and Modified Accrual Basis
GASB Codification Section 1600 – Fund Financial Reporting
Answer: C. recognized when they become measurable and available
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