On December 1, 2013, a state government awards a city government a grant of $1 million to be used specifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2014. For each of the following, indicate whether the statement is true or false and, if false, explain why.
a. Because the government received no money until June 1, 2014, no amount of revenue can be recognized in 2013 on the government-wide financial statements.
b. If this grant has no eligibility requirements and the money is properly spent in September 2014 for the hot lunches, the revenue should be recognized during that September.
c. Because the money came from the state government and because the government specified the use, this is a government-mandated no nexchange transaction.
d. If the government had received the money on December 1,2013, but eligibility requirements I had not been met yet, a deferred revenue of $1 million would have been recognized on the government-wide financial statements.
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