A City Constructs a New Building by Issuing Debt in the Amount

question 17

Multiple Choice

A city constructs a new building by issuing debt in the amount of $3 million.How should the city report the debt proceeds in its Capital Projects Fund statement of revenues,expenditures,and changes in fund balance?

• A)as a revenue
• B)as an other financing source
• C)as a liability captioned general long-term obligations
• D)as a liability captioned due to the debt service fund

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Definitions:

Account Title

The name given to an account that reflects the type of transaction it represents, such as "Sales Revenue" or "Accounts Payable."

Ledger

A comprehensive set of accounts that records all financial transactions of a business, organized within a book or digital system.

Chart of Accounts

A Chart of Accounts is an organized list of all the accounts in the general ledger of a company, systematically arranged and often segmented by account types.