A governmental entity is funding a capital project with the issuance of general obligation bonds, as well as a federal grant. When qualifying expenditure reimbursements are collected, the grant would be reported on the operating statement as

Question

Quizplus · Accepted Answer

The federal grant is a revenue because it represents inflow of economic resources (cash or receivables) to the governmental entity. It is not an other financing source because it is not a source of financing for debt service or capital projects. It is not a nonoperating revenue because it is related to a capital project which is considered an operating activity. It is not an other financing use because it does not represent a use of financing for debt service or capital projects.

A Governmental Entity Is Funding a Capital Project with the Issuance