The General Fund transfers $50,000 to the Debt Service Fund to pay principal and interest. How is this transaction reported in the General Fund?

Answer options:

Expenditure.

Other Financing Use.

Due from Debt Service Fund.

Expense.

How to approach this question

Interfund Transaction Types: 1. Services (Revenue/Exp). 2. Loans (Due To/From). 3. Transfers (OFS/OFU). This is a transfer.

Full Answer

B.Other Financing Use.✓ Correct

Operating transfers between funds are classified as Other Financing Sources (in the receiving fund) and Other Financing Uses (in the paying fund). They are not expenditures.

Common mistakes

Classifying transfers as expenditures.

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