Montana Arts Council Financial-Compliance Audit for the Two Fiscal Years Ended .. 1993

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Page A-7 Page A-8 Notes to the Financial Schedules For the Two Fiscal Years Ended June 30, 1993 1. Summary of Significant Accounting Policies Basis of Accounting The council uses the modified accrual basis of accounting, as defined by state accounting policy, for its Governmental Funds.
In applying the modified accrual basis, the council records: Revenues when it receives cash or when receipts are measurable and available to pay current period liabilities.
Expenditures for valid obligations whe
...n the department incurs the related liability and it is measurable.
State accounting policy also requires the council to record the cost of employees' annual leave and sick leave when used or paid.
The council uses accrual basis accounting for the Non- Expendable Trust Fund. Under the accrual basis, as defined by state accounting policy, the council records revenues in the accounting period earned if measurable.
Expenditures and expenses may include entire budgeted service contracts even though the council received the services in a subsequent fiscal year; goods ordered with a purchase order before fiscal year-end, but not received as of fiscal year-end; and equipment ordered with a purchase order before fiscal year- end.


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