Question

Last year a city received notice of a $150,000 grant from the state to purchase vehicles to transport physically challenged individuals. During the current year the city received the entire $150,000, purchased a bus for $65,000, and issued a purchase order for a van for $60,000. The grant revenue that the city should recognize on the government-wide financial statements in the current year is:

Answer 1

Answer:

The answer is: $0

Explanation:

Government entities have to record grant revenue during the period that they occur. The city received notice of this grant last year, so they recorded the grant revenue in last year's financial statements. If they recognize any grant revenue this year, it must come from a new grant.