A Governmental Entity Is Funding a Capital Project with the Issuance

question 21

Multiple Choice

A governmental entity is funding a capital project with the issuance of general obligation bonds, as well as a federal grant. The grant would be reported on the operating statement as

• A) An other financing source.
• B) A revenue.
• C) A nonoperating revenue.
• D) An other financing use.

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Definitions:

Investing Activity

Financial operations related to acquiring or disposing of non-current assets, crucial for budgeting and strategic planning of an organization's capital.

Financing Activity

Transactions related to raising capital and repaying investors, including issuing stock, paying dividends, and borrowing funds.

Net Income

A company's overall earnings following the deduction of all costs and taxes from its gross income.

Fiscal Year

A twelve-month period used for accounting purposes and preparation of financial statements, which may not align with the calendar year.