Assume that inspection services were performed by the General Fund department on a capital project that is being accounting for in a Capital Project Fund. The inspection is being charged to the project. The entry to record this transaction in the Capital Project Fund would be

Question

Quizplus · Accepted Answer

Since the inspection services were performed by the General Fund department, it is considered an expenditure of the Capital Project Fund. Therefore, the entry would be to debit the expenditures account in the Capital Project Fund and credit the due to General Fund account to show that the General Fund department is owed payment for their services. Option B is incorrect because the inspection did not result in the acquisition of a capital asset. Option C is incorrect because the transaction is not considered an other financing use. Option D is incorrect because the inspection services are not considered revenue for the Capital Project Fund.

Assume That Inspection Services Were Performed by the General Fund