Question

Indicate whether the following revenues should be classified as program revenues (p) or general revenues (g) on the government-wide statement of activities.

1) Program revenues (p)
2) General revenues (g)

Answer 1

Program revenues (p) are generated from specific programs or services, while general revenues (g) are not directly tied to a specific program or service. Fees for specific programs or services are classified as program revenues (p), while revenues from taxes and grants are classified as general revenues (g).

Step-by-step explanation:

On the government-wide statement of activities, program revenues (p) are revenues generated from specific programs or services, while general revenues (g) are not directly tied to a specific program or service. To determine whether a revenue should be classified as program or general, we can consider the nature of the revenue source.

1. If the revenue is generated from fees charged for a specific program or service, such as tuition fees for a school or entrance fees for a park, it should be classified as program revenue (p).
2. If the revenue is generated from taxes, grants, or other sources not directly related to a specific program or service, it should be classified as general revenue (g).

For example, if a state government collects income taxes from its residents, those revenues would be classified as general revenues (g) since they are not directly tied to a specific program or service.