State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with
A) Cost Accounting Standards Board standards.
B) Office of Management and Budget cost circulars.
C) Financial Accounting Standards Board standards.
D) Governmental Accounting Standards Board standards.

Question

Quizplus · Accepted Answer

The Office of Management and Budget (OMB) cost circulars establish the principles and standards for determining costs applicable to grants, contracts, and other agreements with the federal government. These circulars provide guidance on the allowability, allocability, and reasonableness of costs, and they outline specific cost accounting and reporting requirements. Therefore, choice B is the most appropriate option. While other standards, such as those issued by the Cost Accounting Standards Board (CASB) or the Governmental Accounting Standards Board (GASB), may be applicable in certain circumstances, they are not specific to federal grants and contracts and may not be as relevant in this context. Similarly, the Financial Accounting Standards Board (FASB) standards are generally intended for the private sector and do not govern cost accounting practices for government grants and contracts.

State and Local Governments and Not-For-Profit Organizations That Receive Grants