A city receives a federal grant, which the city must pass through to smaller units of government who meet the eligibility requirements. The city must monitor these smaller units of government for compliance with grant requirements.

How should the city recognize this grant in its fund financial statements?

Would your answer be different if the city were not required to monitor the other governments for compliance with grant requirements? Explain. What is the distinction between general obligation debt and revenue bond debt?

Why might a Government Issue revenue bond debt instead of general obligation debt?