The repayment of bond principal should be reported in the fund statements of a debt service fund as a/an
A) Reduction of bonds payable.
B) Expenditure.
C) Other financing use.
D) Direct reduction of fund balance.

Question

Quizplus · Accepted Answer

The repayment of bond principal in the fund statements of a debt service fund is reported as an expenditure. This is because in governmental accounting, the payment of debt principal is considered an outflow of resources that reduces the current financial resources available in the fund.

The Repayment of Bond Principal Should Be Reported in the Fund