On May 1, the City of Dustin Was Notified of Approval

question 89

Multiple Choice

On May 1, the City of Dustin was notified of approval of a $300,000 federal operating grant, payable on a reimbursement basis as the city expends resources for the intended purpose of the grant. As of May 1, no expenditures had been made for grant purposes. The journal entry to record approval of this grant will include:

• A) A credit to Revenues in the amount of $300,000.
• B) A credit to Deferred Inflows of Resources-Grant Proceeds in the amount of $300,000.
• C) A debit to Grants Receivable in the amount of $300,000.
• D) No journal entry will be made until expenditures for the authorized purpose occur.

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Definitions:

Insurance Policy

A contract between an insurer and a policyholder in which the insurer agrees to pay for specified losses in exchange for a premium.

Probability

A measure of the likelihood that an event will occur, often expressed as a fraction or percentage.

Independent Events

Events for which the occurrence of one does not affect the likelihood of occurrence of any of the others.

Public Transportation

A system of vehicles such as buses and trains that operate at regular times on fixed routes and are available for use by the public.