The General Fund Contributes $40,000 to an Internal Service Fund

question 39

Multiple Choice

The General Fund contributes $40,000 to an Internal Service Fund to subsidize the purchase of a capital asset. The contribution is not considered to be an interfund loan. The Internal Service Fund will report this contribution as a

• A) Transfer in.
• B) Capital contribution.
• C) Nonoperating revenue.
• D) Direct equity adjustment to restricted net position.

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Definitions:

Tender

Tender refers to the offer of payment by one party to another, or the offer to perform a contract obligation, in a manner that meets the terms of the contract.

Conforming Goods

Products that meet the specifications and terms outlined in a contract of sale, matching the buyer's expectations.

Buyer's Disposition

The buyer's intention or decision regarding the management, use, or sale of purchased assets.

Sale on Approval

A conditional sales agreement that allows the buyer to return the purchased goods if they don't meet specified requirements.