Apply Governmental Reporting Requirements Practice Test

A school district reports a General Fund and a Special Revenue Fund for a federal nutrition program. The district initially recorded the federal grant as revenue when cash of $600,000 was received; at year-end, only $520,000 of allowable program expenditures had been incurred, and $80,000 remains unspent and must be returned if not used for allowable costs. Under GASB standards for nonexchange transactions (including GASB Statement No. 33), how should the district report the $80,000 in the Special Revenue Fund at year-end?

A city’s General Fund loaned $200,000 in cash to its Special Revenue Fund on October 1 to cover temporary cash flow needs; the loan is expected to be repaid by March 31 of the following year. At December 31, the loan is still outstanding. Under GASB guidance on interfund loans and governmental fund reporting (including GASB Statement No. 34), how should the city report this activity in the fund financial statements?