The receipts of a special tax levy to retire principal and pay interest on general obligation bonds issued to finance the construction of a new fire hall should be accounted for in the

Question

Quizplus · Accepted Answer

The correct answer is C) Debt Service Fund because the primary purpose of a Debt Service Fund is to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. In this case, the special tax levy is specifically for retiring principal and paying interest on general obligation bonds, which aligns with the functions of a Debt Service Fund.

The Receipts of a Special Tax Levy to Retire Principal