A finished ACC-658 Topic 3 modified accrual recognition worksheet example, treating a county's property taxes, capital outlay, bond proceeds, vacation pay and a purchase order under the current financial resources focus. Searches like "acc 658 topic 3 assignment example", "acc658 topic 3 sample" and "acc-658 topic 3 example" land here.
What a finished ACC-658 Topic 3 modified accrual recognition worksheet looks like
The finished worksheet takes each item through the same two questions: is it measurable, and does it affect resources available to pay this year's liabilities? In the illustrative year ending June 30, the county levied $24.0 million of property tax, collected $22.9 million during the year and $0.6 million in the 60 days after year end, and expects the last $0.5 million later. Revenue of $23.5 million is recognized, and $0.5 million sits as a deferred inflow. A $1.8 million fire engine is an expenditure, not an asset. A $5.0 million bond issue is an other financing source, not a liability. Of $0.9 million in accrued vacation, only the $0.1 million owed to employees who had already left is recognized. A $0.3 million purchase order for road salt, still open, is an encumbrance and not an expenditure.
How an ACC-658 Topic 3 example is structured
The worksheet is arranged as one row per item, with the reasoning set out beneath the table. It opens by stating the measurement focus, current financial resources, and the basis that follows from it: revenue once it is both measurable and available, expenditures when the liability will be paid from those resources. The seven items then appear in rows, each with the transaction, the fund entry, the amount recognized, any amount deferred or excluded and the reason. Property tax is worked in detail, since the availability period decides how much of the levy counts. Capital outlay and bond proceeds are paired to show the fund recording neither an asset nor a debt. Debt service and vacation pay follow, both recognized only when due. The encumbrance gets its own passage on budgetary control. The worksheet ends by listing where each excluded amount will appear in the government-wide statements.
One test applied to every item
Each item is asked whether it changes the resources available to pay this year's liabilities, which is what the current financial resources focus measures.
The levy split by availability
Of $24.0 million levied, the $23.5 million collected within 60 days after June 30 counts as revenue and $0.5 million is held as a deferred inflow of resources.
Capital outlay and borrowing paired
The $1.8 million fire engine is an expenditure and the $5.0 million bond issue an other financing source, so the fund carries neither the asset nor the debt.
Debt service recognized when due
The $1.2 million of principal paid in the year is an expenditure, while $0.2 million of interest accrued but not yet due stays out of the fund.
Vacation pay limited to amounts due
Only the $0.1 million owed to departed employees will be paid from current resources, so the remaining $0.8 million waits for the government-wide statements.
An open order kept out of expenditures
The $0.3 million road-salt purchase order is an encumbrance that controls the budget, and no expenditure exists until the salt arrives and is invoiced.
Where marks go in ACC-658 Topic 3
Recording the fire engine as an asset and depreciating it inside the general fund is the error that marks this topic most often, because it applies full accrual to a fund that measures spendable resources. Treating bond proceeds as a liability makes the same mistake from the other side. Recognizing the whole $24.0 million levy ignores the availability test, and recognizing only the $22.9 million collected in the year ignores the 60-day period. Papers that accrue all $0.9 million of vacation pay in the fund count amounts nobody will pay from current resources. Recording the open purchase order as an expenditure confuses budgetary control with the accounting basis. A worksheet that says what the basis does but never what it measures, the resources available for this year's bills, has described the rules without explaining them.
Get an ACC-658 Topic 3 example written to your instructions
Send the ACC-658 Topic 3 instructions and the rubric from your classroom, together with the transactions or trial balance your section supplied. We prepare a custom example to those criteria, with the measurement focus stated, each item recognized, deferred or excluded with its reason and every excluded amount traced forward, in 24 to 48 hours. The first request costs nothing.
ACC-658 Topic 3 questions, answered
What does available mean for revenue?
Collectible within the current period or soon enough afterward to pay liabilities of the current period. For property taxes that later window is commonly limited to 60 days, which is why the $0.6 million collected within 60 days after June 30 counts and the $0.5 million expected later does not. Other revenues may use a different period, which the government discloses. Your instructions will usually state the one to apply.
Why is a fire engine an expenditure?
Because the general fund measures current financial resources, and buying the engine used $1.8 million of them. The fund's question is how much spendable money remains, not what the county owns. The engine is not lost to the accounts: it appears as a capital asset, with depreciation, in the government-wide statements, which use full accrual. The bridge from fund to government-wide statements is where the difference is explained.
Is an encumbrance a liability?
No. It is a budgetary commitment, recorded when a purchase order is issued so the same appropriation cannot be spent twice. No liability exists until goods or services are received. At year end, open encumbrances are not reported as expenditures or liabilities, though the related resources may be shown as restricted, committed or assigned fund balance depending on the constraint already on them.