Property taxes due and collectible 90 days after the fiscal year end would be recorded as revenues in 2027 in which journal?

• A. Yes No
• B. No No
• C. No Yes
• D. Yes Yes

Answer: (C)

Under modified accrual, government revenues are recognized when they are both measurable and available to finance current period expenditures. If property taxes are due and collectible 90 days after the fiscal year end, they are not available in the year of the levy. That means you don’t record the revenue in the first journal that would capture revenues for the year of the levy. Instead, you record the receivable (and a deferred inflow of resources for the portion not yet available). When the taxes become available in the following year (2027), you recognize the revenue in the revenue journal by moving the amount from the deferred inflow to actual revenue. So the correct approach is to not recognize revenue in the first journal, and to recognize it in 2027 in the revenue journal.