The City of Holbrook Transferred $100,000 from the General Fund

question 32

Multiple Choice

The City of Holbrook transferred $100,000 from the general fund to a debt service fund for payment of interest. The appropriate entry in the debt service fund to record this transfer would be

• A) Debit Cash $100,000; Credit Revenue $100,000.
• B) Debit Cash $100,000; Credit Reciprocal transfer-in $100,000.
• C) Debit Cash $100,000; Credit Fund balance $100,000.
• D) Debit Cash $100,000; Credit Nonreciprocal transfer-in $100,000.

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Definitions:

Net Income

It represents the amount of money that remains after subtracting all operating expenses, taxes, and costs from total revenue – a key indicator of a company's financial health.

Long-Term Debt

Long-term debt refers to loans and financial obligations lasting more than one year, often used for significant investments or expenses by a company.

Equity

The value of an ownership interest in a firm, including stocks and retained earnings, representing the residual assets after deducting liabilities.

Investing Activities

Financial transactions and events related to acquiring or disposing of assets, such as the purchase or sale of equipment or securities, reflected in the cash flow statement.