GOV-Expenditures

Question 1

Tott City’s serial bonds are serviced through a debt service fund with cash provided by the general fund. In a debt service fund’s statements, how are cash receipts and cash payments reported?

Answer 1

transfer between funds does not carry a stipulation for repayment between the funds and does not meet the definition of revenue. Therefore, any answer with “revenue” would never be correct. The purpose of a debt service fund is to make the required payments on the debt and would be a classic example of an expenditure.