The City of Holbrook transferred $100,000 from the General Fund to the Debt Service Fund for payment of interest.The appropriate entry in the General Fund to record this transfer would be
A)Debit Expenditures $100,000; Credit Cash $100,000.
B)Debit Other financing uses-transfer out $100,000; Credit Cash $100,000.
C)Debit Fund balance-transfer out $100,000; Credit Cash $100,000.
D)Debit Other financing sources-transfer in $100,000; Credit Cash $100,000.

Question

Quizplus · Accepted Answer

The transfer of funds from one fund to another is considered an other financing use-transfer out in governmental accounting. Therefore, the appropriate entry in the General Fund would be a debit to Other financing uses-transfer out for $100,000 and a credit to Cash for $100,000.

The City of Holbrook Transferred $100,000 from the General Fund