If Taxes Are Levied Specifically for Payment of Interest and Principal

question 89

Multiple Choice

If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are:

• A) Included as a liability of the General Fund.
• B) Recorded as operating transfers to the debt service fund.
• C) Included as revenues of the debt service fund.
• D) Both A and B are correct.

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Definitions:

Limited Liability

A legal structure that limits an owner's loss to the amount invested in a company, protecting personal assets from the company's debts and obligations.

Partnership Interest

The share or portion of ownership that a partner has in a partnership, often reflected in the percentage of the business's profits or losses they receive.

Government Regulations

Laws and rules established by governments to control and guide the activities of businesses and individuals in order to ensure public safety, fairness, and compliance.