Accounting for federal and nonfederal grants and contracts requires an accounting system that can associate line-item expenses with functional programs with funding sources.

Question

Quizplus · Accepted Answer

As seen in Illustration A12-2, some programs are fully funded from one resource provider (or grant), while others may receive funding from two or more grantors. Some grantors may fund more than one program in a government or not-for-profit organization. An accounting system (and chart of accounts) must be designed to classify transactions in three ways (i.e., line-item expense, functional program, grantor) in order to properly account to the resource providers and other stakeholders.

Accounting for Federal and Nonfederal Grants and Contracts Requires an Accounting