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<br /> 12.~T;F <br /> City of San Marcos, Texas <br /> Exhibit 6 <br /> Notes to General Purpose Financial Statements (continued) <br /> September 30, 1992 <br /> 1. Significant Accounting Policies (continued) <br /> Basis of Accounting <br /> Basis of accounting refers to the timing of revenue and expenditure or expense <br /> recognition in the accounts and reporting in the financial statements. Basis of accounting <br /> relates to the timing of the measurements made, regardless of the measurement focus <br /> applied. <br /> Governmental funds and expendable trust funds are accounted for on the modified <br /> accrual basis of accounting. Under the modified accrual basis of accounting, revenues <br /> are recorded when susceptible to accrual (i.e., both measurable and available). Available <br /> means collectible within the current period or soon enough thereafter to be used to pay <br /> liabilities of the current period. Expenditures are recorded when the related fund <br /> liabilities are incurred. An exception to this general rule includes the unmarured principal <br /> and interest on general obligation long-term debt, which is recognized when due. This <br /> exception is in conformity with generally accepted accounting principles. <br /> Ad valorem property tax revenue is recorded when it becomes available. Available <br /> means then due, or past due and receivable within the CUITent period and collected within <br /> the current period or expected to be collected soon enough thereafter to be used to pay <br /> liabilities of the current period. Such time thereafter shall not exceed 60 days. Amounts <br /> of property taxes receivable considered collectible and not yet recognized as revenue are <br /> included in deferred revenue. In 1992 the City recognized penalties and interest due on <br /> delinquent taxes receivable as a componenç of delinquent taxes receivable. The <br /> additional receivable has been recorded as deferred revenue until available; therefore, this <br /> change had no effect on fund balances. <br /> Sales tax and mixed drink: tax are recorded when susceptible to accrual, both measurable <br /> and available. Licenses and permits, charges for services, fines and forfeitures, and <br /> miscellaneous revenues (except earnings on investments) are recorded as revenues when <br /> received in cash because they are generally not measurable until actually received. <br /> Investment earnings are recorded on the accrual basis in all funds. <br /> -16- <br />