Use the following information to answer questions
During the year the 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 Self-Insurance Fund can recognize as revenue is
A)$620,000
B)$600,000.
C)$540,000.
D)$500,000.

Question

Use the following information to answer questions 
During the year the 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 Self-Insurance Fund can recognize as revenue is
A)$620,000
B)$600,000.
C)$540,000.
D)$500,000.

Quizplus · Accepted Answer

The Self-Insurance Fund can recognize as revenue the amount billed to the General Fund, which is $600,000. The additional $20,000 transferred is not considered revenue as it is not part of the billed premiums.

Use the Following Information to Answer Questions