A local government was awarded a federal grant in the amount of $800,000 to provide for a summer youth employment program for young people. The grant was a reimbursement grant and a notification of the grant award was received on Apri1 30, 2009. The local government expended the resources as follows: • June, 2009, $300,000;
• July, 2009, $250,000;
• August, 2009, $250,000
The federal government sent the funds in the month following the expenditure. The local government would recognize revenues for the fiscal year ended June 30, 2009 in which amount?

Question

Quizplus · Accepted Answer

The local government can only recognize revenue when it incurs the expenditures, which were in June, July, and August of 2009. Since the grant was a reimbursement grant, the funds were not received until the following month. Therefore, the local government can only recognize revenues for the expenditures in the fiscal year ended June 30, 2009 which are $300,000.

A Local Government Was Awarded a Federal Grant in the Amount