Which statement is not correct? Multiple Choice Governmental funds account for expenditures of financial resources rather than matching revenues and expenses. The Encumbrances Outstanding account should be reversed and closed at the end of a fiscal year. Revenues from licenses and permit fees are recognized when received in cash if using the modified accrual basis of accounting for governmental funds. A fund is an independent accounting entity composed of cash and other financial resources, segregated for the purpose of carrying on specific activities and objectives.