Use the following information to determine whether the Development Special Revenue and the Debt Service Funds should be reported as major funds based on asset amounts provided. $ \begin{array}{llr}\text { Development Special Revenue Fund Assets } & \$ & 740,000 \ \text { Debt Service Fund Assets } & \$ & 150,000 \ \text { Total Governmental Fund Assets } & \$ &7,500,000 \ \text { Total Governmental Fund and Enterprise Fund Assets } & \$ &8,750,000\end{array} $

A) The Development Special Revenue Fund should be reported as major.
B) The Debt Service Fund should be reported as major.
C) Both the Development Special Revenue Fund and the Debt Service Fund should be reported as major.
D) Neither the Development Special Revenue Fund nor the Debt Service Fund should be reported as major.

Question

Use the following information to determine whether the Development Special Revenue and the Debt Service Funds should be reported as major funds based on asset amounts provided. $ \begin{array}{llr}\text { Development Special Revenue Fund Assets } & \$ & 740,000 \ \text { Debt Service Fund Assets } & \$ & 150,000 \ \text { Total Governmental Fund Assets } & \$ &7,500,000 \ \text { Total Governmental Fund and Enterprise Fund Assets } & \$ &8,750,000\end{array} $
 
A) The Development Special Revenue Fund should be reported as major.
B) The Debt Service Fund should be reported as major.
C) Both the Development Special Revenue Fund and the Debt Service Fund should be reported as major.
D) Neither the Development Special Revenue Fund nor the Debt Service Fund should be reported as major.

Quizplus · Accepted Answer

To determine if a fund should be reported as major, it generally needs to meet certain criteria, such as containing 10% or more of the total assets for its category (governmental or enterprise) and 5% or more of the combined total assets of all governmental and enterprise funds. The Development Special Revenue Fund's assets are $740,000, which is less than 10% of the total governmental fund assets ($7,500,000), and the Debt Service Fund's assets are $150,000, also less than 10% of the total governmental fund assets. Neither fund meets the 10% criterion, nor do they likely meet the 5% criterion when considering the combined total assets of $8,750,000. Therefore, neither should be reported as major based on the information provided.

Use the Following Information to Determine Whether the Development Special