During the year Endor City’s self-insurance internal service fund billed the general
fund $600,000 for “premiums,” of which $60,000 was for catastrophic losses and the balance was the premium computed on an actuarially determined basis. During the year the city incurred $500,000 in claims losses. The total amount transferred to the self-insurance fund by the general fund was $620,000.

-The amount the city's general fund can recognize as an expenditure is
A) $620,000.
B) $600,000.
C) $540,000.
D) $500,000.

Question

During the year Endor City’s self-insurance internal service fund billed the general 
fund $600,000 for “premiums,” of which $60,000 was for catastrophic losses and the balance was the premium computed on an actuarially determined basis.  During the year the city incurred $500,000 in claims losses. The total amount transferred to the self-insurance fund by the general fund was $620,000.

-The amount the city's general fund can recognize as an expenditure is
A) $620,000.
B) $600,000.
C) $540,000.
D) $500,000.

Quizplus · Accepted Answer

The amount recognized as an expenditure in a city's general fund is typically based on the actual amount spent or encumbered within a fiscal period. Without specific details on the expenditures or obligations of the city's general fund, the most accurate answer cannot be determined from the provided options alone. However, if $600,000 represents the total amount spent or obligated by the fund, it would be the correct choice by default in this context.

During the Year Endor City’s Self-Insurance Internal Service Fund Billed