What amount should a municipality recognize as June sales tax revenue if it cannot determine the amount collected by June 30, 20X1?

When a municipality cannot determine the amount of sales tax revenue collected by the close of the reporting period, the most appropriate accounting treatment is to recognize zero revenue for that period. This stems from the revenue recognition principle, which requires that revenue can only be recognized when it is earned and realizable. In the case where the amount is unknown or cannot be reliably measured, it fails to meet these criteria.

Recognizing revenue without certainty about the amount could misrepresent the municipality's financial position, leading to potentially misleading financial statements. This approach upholds the integrity and reliability of the financial information reported, as it avoids the premature recognition of income. Thus, the decision to record zero sales tax revenue aligns with accounting principles that prioritize accuracy and substantiation in financial reporting.