Which of the following transactions is classified as an exchange transaction?
A) Fees charged for use of an athletic field at a city park.
B) State grant to conduct a smoking cessation program for middle school-aged youth.
C) Bequest left to the city by a former mayor.
D) Personal property taxes.

Question

Quizplus · Accepted Answer

An exchange transaction involves a buyer and seller where goods, services or money are exchanged. In this case, the fees charged for use of an athletic field can be considered as an exchange transaction as the city is providing a service (use of the field) in return for the fees paid by the users.

B) can be classified as a non-exchange transaction as the state grant is intended to fund a public health program without an expectation of direct benefit to the state.

C) can be classified as a non-exchange transaction as the bequest left by the former mayor is a gift or donation to the city without an expectation of direct benefit to the donor.

D) can be classified as a tax revenue, which is a type of non-exchange transaction where the government levies taxes to fund public services without an individual receiving a direct benefit in return for the tax paid.

Which of the Following Transactions Is Classified as an Exchange