A city receives a $200,000 grant from the state to purchase vans to transport physically challenged individuals.During the current year the city receives the entire $200,000 and purchases one bus for $85,000 and issues a purchase order for another van for $80,000.The grant revenue that the city should recognize on the government-wide financial statements in the current year is

Question

Quizplus · Accepted Answer

The city should recognize the entire $200,000 grant revenue in the government-wide financial statements in the current year because the grant was received and is intended for a specific purpose, regardless of the timing of the expenditures.

A City Receives a $200,000 Grant from the State to Purchase