Proprietary funds utilize what basis of accounting?

Accounting Dec 18, 2020

Expert Solution

Proprietary funds utilize the accrual basis of accounting.

Since a proprietary fund operates like a business, the accrual basis gives a more accurate picture of the fund's performance than a modified accrual or cash basis. This can allow stakeholders to determine whether fees are adequate to pay for the fund's expenses or if they need to be adjusted.

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