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BUDGETARY BASIS OF ACCOUNTING

Budgets of general governmental fund types are prepared on a modified accrual basis.
Under the modified accrual basis of accounting, revenues are recognized when they are
measurable (the amount of revenue can be determined) and available (collectable
within the current period). Expenditures are recorded when they are incurred. The
following funds are governmental type funds and their budgets are prepared on that
basis: General Fund, Debt Service Fund, Capital Projects Fund, Crime Control and
Prevention District Fund, Street Maintenance Fund, Court Security Fund, Court
Technology Fund, Hotel/Motel Tax Fund, Municipal Development District Fund, and the
Cable PEG Fee Capital Projects Fund.

The enterprise funds are prepared on a full accrual basis. Under the full accrual basis
of accounting, revenues are recorded when earned and expenses are recorded at the
time they are incurred. The following funds are based on full accrual: Utility Fund,
Utility Capital Projects Fund, Golf Course Fund and Stormwater Utility Fund.

City of Azle 2020-2021 Budget 21