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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 General Fund can recognize as an expenditure 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 General Fund can recognize as an expenditure is
A)$620,000.
B)$600,000.
C)$540,000.
D)$500,000.

Quizplus · Accepted Answer

The General Fund can recognize the billed amount of $600,000 as an expenditure, which includes the actuarially determined premium and the catastrophic loss premium.

Use the Following Information to Answer Questions