RECOMMENDED!!A government accounts for inventory on
3. A government accounts for inventory on the consumption basis. Why do some accountants believe that it should offset the year?end inventory balance with a fund balance—nonspendable when no comparable fund balance is required for cash, taxes receivable, or most other assets?4. A government accounts for inventory on the purchases basis. Why must it offset its year?end inventory balance with an addition to fund balance?5. Governments are not required to accrue interest on long?term debt in governmental funds even if the interest is applicable to a current period and will be due the first day of the following year. Explain and justify the standards that permit this practice.
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