Revenue earned at a reporting date, but not yet received, is accrued. Revenue received, but applicable to future periods, is deferred. The modified form of accrual accounting still recognizes expenses by the receipt of a good or service. However, obligations representing outstanding purchase orders, and other commitments for materials and services not received as of the reporting date, are included as allocations of fund balances in the statement of financial position. The only basis for the omission of accruals, deferrals, and obligations is when the omission has no material effect on the financial statements.
Additional reports are prepared to provide relevant management information.
One of the basic management reports is the monthly Report of Transactions, a statement of financial condition for accounts which summarizes current activity.