When my DD was in 2nd grade but was subject accelerated into 3rd grade for the mornings (math, reading, writing, gym, art), she had her 2nd grade subjects listed on her report card as 2nd grade subjects with their respective benchmarks and she had her 3rd grade subjects listed on her report card as 3rd grade subjects with their respective benchmarks. Now, doing this was quite the feat with district computer programmers involved and she only ended up getting an accurate end-of-year report card (they hand-wrote a copy of the mid-year report card for her district files because they hadn't yet figured out how to do it on the official copy). For us, the 2nd grade report card template into which the teachers enter grades is different that the 3rd grade report card template, so it can't be just a matter of having one teacher put in one set of grades and the other teacher putting in another set of grades. Too, the principal didn't think it was acceptable to just put a note in the notes section saying that she was accelerated -- he wanted each skill area to be fully documented. DD was the first child subject (and later grade) accelerated in our district that anyone can remember, so she was the guinea pig. DS is now subject accelerated, so we'll see if they have a system fully in place to do this easily now.
A note about standardized testing: In our case, DD was not allowed to take the 3rd grade state tests, even though she was in 3rd grade in all the tested subjects, because she was still officially classified by the state as a 2nd grader. Unfortunately, on the several days the 3rd graders were taking the state tests, she was sitting in 2nd grade actually grading her 2nd grade classmates' math minutes.(GRRR!)