A City Receives Notice of a $150,000 Grant from the State

question 70

Multiple Choice

A city receives notice of a $150,000 grant from the state to purchase vans to transport physically challenged individuals. Although the city did not receive any of the grant funds during the current year, the city 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 in the government-wide financial statements in the current year is

• A) $-0-.
• B) $ 65,000.
• C) $125,000.
• D) $150,000.

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Definitions:

Sales

Transactions involving the exchange of goods or services for money or other compensation.

Experience

The knowledge or skill acquired by a person over time through involvement in or exposure to events.

Linear Relationship

A type of correlation where changes in one variable are directly proportional to changes in another variable.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, usually denoted by α.