Financial resources set aside to pay principal and interest on general long-term debt may be accounted for in which of the following fund types?
A) Private-purpose trust fund.
B) Debt service fund.
C) Principal and interest trust fund.
D) Internal service fund.

Question

Quizplus · Accepted Answer

Financial resources set aside to pay principal and interest on general long-term debt are accounted for in a debt service fund. Private-purpose trust funds are used to account for resources that are legally restricted for specific purposes. Principal and interest trust funds are used for the same purpose as debt service funds, but they are typically used for specific bond issues. Internal service funds are used to account for the financing of goods or services provided by one department to other departments within the same government entity.

Financial Resources Set Aside to Pay Principal and Interest on General