Which statement best describes the recognition of program revenues in connection with single program grants accounted for in more than one function?

Program revenues from single program grants that are accounted for across multiple functions can be recognized, even when a formula is necessary for allocation among those functions. This is based on the understanding that grants typically come with stipulations on how funds are to be used, but that doesn't preclude the recognition of revenues.

In the context of accounting, recognizing program revenue reflects an economic resource that the organization has gained, regardless of the complexity in distributing it among various functions. When an allocation formula is used, it provides a systematic approach to apportioning funds based on certain criteria, which allows the organization to fairly distribute and utilize those resources in alignment with the requirements of the grant.

Thus, recognizing the revenue further aligns with the principles of accrual accounting, which emphasize the recognition of economic activity as it occurs, rather than strictly based on cash flows or simple allocation methods. As a result, as long as there is a systematic method for allocation, recognition of the total program revenue is appropriate, even if a formula is involved in the distribution process.