Significantly, the general fund reports the modified-cash and modified-accrual basis of accounting as mandated by the State of Mississippi. It is a hybrid of the two most common bookkeeping approaches involving cash and accrual accounting.
Long-term assets are recorded on an accrual basis, while short-term assets are recorded in cash to provide the best of both worlds. Sustaining a comprehensive set of accrual accounting records is highly time-consuming, but it provides a better view of its performance and helps keep expenses down when feasible.
At the same time, modified accrual combines the cash basis with the complete accrual basis. To acknowledge revenue, it must be quantifiable and easily accessible. Because expenditures are always quantified when incurred, they are recorded on a full accrual basis.
The City considers revenues accessible if gathered within 60 days after the end of the current fiscal month. Accounting principles such as accrual accounting require that expenditures be recorded at the time of the occurrence of an obligation. However, debt service costs and expenses linked to compensated absences, judgments, and claims are reported only when payment is due.
The current fiscal period’s property taxes, franchise taxes, licensing fees, interest income, and other comparable things are all deemed accretive and, as a result, have been included in the current fiscal period’s revenues.