Interfund Transfers Occur Between Individual Funds in the Same Government

question 83

Multiple Choice

Interfund transfers occur between individual funds in the same government system without the requirement of repayment. If the General Fund transferred money to the Debt Service Fund, how would the General Fund account for the transaction?

• A) As a non-operating expense.
• B) As an operating expense.
• C) As a use of funds on the activities statement.
• D) As a source of funds on the activities statement.

---

Definitions:

Premium

The amount paid in excess of a standard cost or the face value of a financial instrument, often associated with insurance policies, bonds, and options.

Carrying Value

The book value of assets and liabilities as represented in the financial statements, excluding the market value.

Callable Bonds

Bonds that are subject to redemption (buy back) at a stated dollar amount prior to maturity at the option of the issuer.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a portion of the company's profits through dividends.