When a city received a federal grant for books to be purchased for a library, the money should have been recorded in
A) the Permanent Fund.
B) an Expendable Trust Fund.
C) a Capital Projects Fund.
D) an Agency Fund.
E) a Special Revenue Fund.

Question

Quizplus · Accepted Answer

Since the federal grant is intended for a specific use (purchasing books) and is expected to be spent within a specific time frame, it should be recorded in a Special Revenue Fund, which is used to account for revenue from specific sources that are restricted for particular purposes.

When a City Received a Federal Grant for Books to Be