GFOA Exam CPFO Topic 8 Question 83 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 83
Topic #: 8

[All CPFO Questions]

Small local governments and nonprofits use a third accounting basis, the cash basis, unapproved by GAAP. Cash accounting is used because ____________ accounting, though more accurate, is more complex and costly.

ADeferral

BAccrual

CModified

DBoth B & C

Show Suggested Answer

Suggested Answer: B

by Jennie at Mar 19, 2024, 04:52 PM

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Lizette

3 days ago

But accrual accounting provides a more accurate picture of financial health, so maybe a modified approach would be better.

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Rosalia

5 days ago

I agree with Reita, cash basis is easier to understand and less costly.

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Reita

8 days ago

I think small local governments and nonprofits use cash basis because it's simpler.

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