A school district receives a grant from the federal government to reimburse the district for the salaries of teachers in an "English as a Second Language" program.The grant has no time requirements.The school district has paid the teachers and expects to receive payment from the federal government within 30 days of year-end.Which of the following journal entries would be needed for the school district?

Question

Quizplus · Accepted Answer

DExplanation: The correct journal entries reflect the school district's expectation to receive payment from the federal government and the recognition of the grant revenue. Entry C debits "due from federal government," which records the receivable from the federal government, and credits "intergovernmental revenues - grants," recognizing the revenue from the grant. Entry D debits "due from federal government," acknowledging the amount to be received, and credits "deferred revenues - grants," which would be used if the revenue recognition criteria are not yet met, but since the grant has no time requirements and the expenses have already been incurred, entry C is more accurate for immediate revenue recognition. However, in practice, both entries might be seen in different contexts depending on when the revenue is recognized according to accounting policies.

A School District Receives a Grant from the Federal Government