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IRS Wouldn't Allow Governments To Do Their Books The Way They Do
4/29/2012

Why do governments use cash basis accounting to calculate their budgets?


The IRS requires a corporation with revenue of more than $5 million to do its books using accrual basis.*

Why do governments with revenues of tens of millions of dollars, if not tens of billions of dollars, use the cash basis to calculate their budgets?

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*2011 Instructions for Form 1120
Page 5
http://www.irs.gov/pub/irs-pdf/i1120.pdf

 

 
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