Which of the Following Activities Would Be Classified as a Reciprocal

question 6

Multiple Choice

Which of the following activities would be classified as a reciprocal interfund activity?

• A) Cash transfer from the general fund to a debt service fund to pay for principal and interest on long-term debt
• B) Transfer from a capital projects fund to the general fund to reimburse the general fund for its payment of the architect's fee related to new construction
• C) Purchase of supplies by the general fund from an internal service fund
• D) Transfer of funds from the general fund to establish a new internal service fund

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Definitions:

Service Fee

A charge for the provision of a service, often added to the basic price of the service.

Journal Entries

The basic unit of accounting record that details a financial transaction, showing debits and credits to accounts impacted by the transaction.

Honoring

The act of fulfilling or adhering to agreements, commitments, or payments.

Dishonoring

Dishonoring occurs when a promised payment, such as a check or electronic payment, is not completed due to insufficient funds or rejection by the bank.