Final answer:
It is true that program revenues are distinguished from general revenues on the government-wide statement of activities under GASB standards. Program revenues are specific to individual programs, while general revenues are not restricted and can be used for any purpose within the government entity. This allows for clearer financial reporting and better understanding of a government's financial position.
Step-by-step explanation:
Yes, program revenues are indeed distinguished from general revenues on the government-wide statement of activities under GASB (Governmental Accounting Standards Board) standards. Program revenues are those derived directly from the program itself or parties outside the reporting government's taxpayers or citizenry, specifically for the program.
This includes fees paid by recipients for goods or services offered by the programs, as well as grants and contributions restricted to meeting the operational or capital requirements of the program. In contrast, general revenues are all other revenues that are not classified as program revenues. These generally include tax revenues and other items not restricted to specific programs, such as unrestricted grants and contributions.
Understanding the difference between program and general revenues is crucial for accurate financial reporting in government-wide statements. The Governmental Accounting Standards Board ensures that through standards like these, readers of the financial statements can distinguish between revenues that are meant to support specific programs versus those that serve the government entity's overall needs.
In the context of broader fiscal policy, budgets for all levels of government—federal, state, and local—outline expected revenue through taxes and other income, and detail how they plan to spend these funds. These budgets can be affected by a range of factors, including policy decisions and unexpected events, which can significantly alter tax and spending plans over time.