The governmental funds report a total of $1,000,000 Transfers In and $750,000 Transfers Out. To consolidate governmental activities what amount will be eliminated from the Transfers In and Transfers Out accounts?

Question

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Transfers often represent cash transactions between funds. To eliminate inter-fund transfers while consolidating governmental activities, the Transfers In and Transfers Out amounts between different funds are eliminated. Hence, only the lower amount of $750,000 will be eliminated from both the Transfers In and Transfers Out accounts.

The Governmental Funds Report a Total of $1,000,000 Transfers in and $750,000