Q1. How does the modified accrual basis of accounting differ from the accrual basis?
-The concept of Modified Accrual basis is more popular in the preparation of the financial statements of Government Agencies as those financial statements focus on the flow of current financial resources and if the available resources were allocated and used in conformity with the budgetary and other financial constraints. Under this accrual method, the government agencies use the combination of accrual accounting and cash basis accounting. Hence, under this accrual method of accounting, revenues that will not be collected in the time period so as to pay-off current period obligations, will not be included as part of revenue figures. ...