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Test:CPA Financial Accounting and Reporting (FAR)
1. | The city of Frankford assesses a sales tax on all purchases over $40,000. On December 28, Year 1, a sale of $65,000 occurs that will result in a payment of a tax to the city of $2,400. The payment is expected to be received during March of Year 2. Assets such as investments and receivables are viewed as current if they are collectible within 60 days. How should this tax revenue be reported in the Year 1 fund financial statements? |
It should be divided proportionately between Year 1 and Year 2
As an encumbrance
It should not be recorded until Year 2
As a revenue
Armin
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The University of Texas at Dallas, Bachelor of Science, Biology, General. The University of Texas at Dallas, Bachelor of Scie...
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