Author Question: The county received a 1,500,000 restricted grant from the state government to be used to improve its ... (Read 72 times)

Anajune7 · **on:** Jul 6, 2018

The county received a 1,500,000 restricted grant from the state government to be used to improve its public safety department's communication systems. The county has met all eligibility requirements of the grant.

In the current year, the General Fund should report this grant as
A. Other financing sources.
B. Deferred revenues.
C. Revenues.
D. Unearned revenues.

Question 2

If capital assets are purchased with General Fund cash, what effect will this transaction have on the assets and fund balance, respectively, of the fund?

a. Neither assets nor fund balance will change (the increase in capital assets will offset the decrease in cash).
b. Both assets and fund balance will increase.
c. Both assets and fund balance will decrease.
d. Assets will not change but fund balance will increase.
e. Assets will increase and fund balance will decrease.