In the government-wide statement of activities, which is a required program revenue category?

• A. Fees for services.
• B. Operating grants and contributions.
• C. Capital grants and contributions.
• D. Taxes.

Answer: (B)

Program revenues are those revenues that directly support a specific program and are shown separately from general revenues in the government-wide statement of activities. They offset the cost of the programs they fund and come in three main forms: charges for services, operating grants and contributions, and capital grants and contributions. The option operating grants and contributions is the best illustration here because it represents external funding that supports the ongoing operations of a program, precisely the type of revenue that reduces the net cost of operating activities. Taxes, in contrast, are general revenues not tied to any particular program, and fees for services and capital grants are other forms of program revenues but the item listed specifically as operating grants and contributions is the canonical example of a program revenue category focused on operating support.