When a supplies internal service fund records a billing to the General Fund, the journal entry in the General Fund will include:
A) A debit to Cost of Supplies Issued.
B) A credit to Interfund Loans Payable.
C) A debit to Expenditures.
D) A credit to Billings to Department.

Question

Quizplus · Accepted Answer

When a supplies internal service fund records a billing to the General Fund, it means that the General Fund has incurred an expenditure (which is the cost of supplies issued). Therefore, the journal entry in the General Fund will include a debit to Expenditures. There is no credit to Interfund Loans Payable or Billings to Department in this scenario as the supplies internal service fund does not borrow or bill departments directly.

When a Supplies Internal Service Fund Records a Billing to the General