Assume the General Fund borrows $50,000 from the Enterprise Fund. The interfund loan is scheduled to be paid back in five years. Which of the following statements properly characterizes the reporting effects of this transaction?

Question

Quizplus · Accepted Answer

The General Fund borrowing $50,000 from the Enterprise Fund will increase both General Fund Assets and Liabilities. This is because the $50,000 will be recorded as an asset on the General Fund's balance sheet, but also as a liability owed to the Enterprise Fund. The borrowing does not affect General Capital Assets, Fund Balance, or General Long-Term Liabilities.

Assume the General Fund Borrows $50,000 from the Enterprise Fund