California Code of Regulations
Title 2 - Administration
Division 2 - Financial Operations
Chapter 2 - State Controller
Subchapter 3 - Accounting Procedures for Special Districts
Article 9 - Other Districts
Section 1111.3 - Accounting Basis

The modified cash basis of accounting is prescribed with full accrual available as an option. Under the modified cash basis expenditures are recorded when the liability for payment exists; revenue is recorded when received. Under full accrual expenditures are recorded when payable and revenues when receivable. Since the accrual of revenues is optional, a district may elect to accrue some, but not all, revenues so long as this election is consistently exercised.