When a Cash and Investment Pool of a Certain City

question 49

Multiple Choice

When a cash and investment pool of a certain city was established, the debt service fund transferred investments to the pool having a cost of $3,000,000 but a current fair market value of $2,900,000. To record this transaction, a single journal entry was made by the debt service fund that included which of the following?

• A) A debit to Equity in Pooled Cash and Investments in the amount of $3,000,000.
• B) A debit to Revenues-Change in Fair Value of Investments in the amount of $100,000.
• C) A debit to Investments in the amount of $2,900,000.
• D) A credit to Investments in the amount of $100,000.

Comprehend the ethical implications of communication motives.

Recognize when to deliver bad news in person based on the situation and proximity of the affected individuals.

Understand the significance of anticipating the receiver's reaction in choosing the strategy for delivering bad news.

Understand the significance and structure of delivering bad-news messages in a business environment.

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Definitions:

Incremental Operating Cash Flow

The additional amount of cash flow a company generates from its operating activities due to a specific decision or project.

Capital Spending

Expenditures by a company for the acquisition or improvement of long-term assets such as property, plants, and equipment in order to expand its operations or efficiency.

Sunk Cost

Costs that have already been incurred and cannot be recovered, and thus should not influence current/future business decisions.

Capital Budgeting

The process a business undertakes to evaluate potential major projects or investments, focusing on analyzing future cash flows and profitability.