The cash and investment pool of Lake City allocates dividends, interest, and capital gains and losses on a periodic basis. When the cash and investment pool accrues interest earned on investments in debt securities, pending allocation to participating funds, it would credit which of the following accounts?

Question

Quizplus · Accepted Answer

The interest earned on investments in debt securities, pending allocation to participating funds, should be credited to the "Undistributed Earnings on Pooled Investments" account. This account represents the amount of income earned by the pooled investments that has not yet been allocated to the participating funds. Therefore, option C is the correct answer. Option A is incorrect because "Interfund Loans" account represent amounts borrowed by one fund from another. Option B is incorrect because "Revenues" account is used to record inflows of resources other than non-exchange transactions. Option D is incorrect because "Interfund Receivables" account represent amounts due to a fund from another.

The Cash and Investment Pool of Lake City Allocates Dividends