The city council decides to close the Library Special Revenue fund and send its remaining resources ($45,000 cash)to the General Fund.What account should the Library Special Revenue Fund debit when it sends the cash to the General Fund?

Question

Quizplus · Accepted Answer

When a fund sends its remaining resources to another fund, it is considered a transfer out. Therefore, the Library Special Revenue Fund should debit the account "transfer out to general fund" to properly account for this transaction. Option A "advance to general fund" is incorrect because it implies the transfer of resources from the General Fund to the Library Special Revenue Fund, which is not the case. Option C "due from general fund" is incorrect because it implies that the General Fund owes money to the Library Special Revenue Fund, which is not the case. Option D "expenditures - fund closeout" is incorrect because it reflects a transaction that would happen in the receiving fund, not the transferring fund.

The City Council Decides to Close the Library Special Revenue