Which of the following statements is FALSE regarding the treatment of school lunch programs?

The statement that donated commodities should not be reported in a special revenue fund because they are not financial resources is valid within the context of governmental accounting principles. In government accounting, a special revenue fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Donated commodities do not represent financial resources in the same way that cash or other financial assets do; instead, they are in-kind contributions.

When it comes to governmental financial reporting, donated commodities are recognized as revenue when they are received. However, they are also classified as expenses, recognized when these commodities are consumed, reflecting the economic reality of how they are utilized. This approach aligns with accounting standards which stipulate that the recognition of resources should adhere to the timing of their consumption and availability.

Furthermore, since donated commodities are not monetary assets, they do not meet the criteria for inclusion in special revenue funds focused on cash inflows. Thus, the assertion regarding their treatment as non-financial resources correctly supports why this statement is considered false.