To Offset Engineering and Design Costs Incurred Prior to the Issuance

question 54

Multiple Choice

To offset engineering and design costs incurred prior to the issuance of a long-term bond issue, a capital projects fund borrowed the sum of $75,000 on a short-term basis from First National Bank. This transaction should be recorded in:

• A) The capital projects fund.
• B) The debt service fund.
• C) The special revenue fund.
• D) None of the options are correct. Debt is not recorded in governmental funds.

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Definitions:

Price Elasticity

A measure of the sensitivity of the quantity demanded or quantity supplied of a good to a change in its price.

Perfectly Inelastic

This describes a situation in economics where the demand or supply for a good is completely unresponsive to changes in price.

Fresh Fish

Refers to fish that have been recently caught and have not been frozen or preserved, ensuring maximum freshness and quality.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price.