The General Fund of a city made a permanent transfer of $100,000 to an enterprise fund.At year-end,the balance sheet accounts that would reflect the $100,000 in the enterprise fund would be cash and:

Question

Quizplus · Accepted Answer

The $100,000 transfer represents a permanent capital contribution to the enterprise fund, and therefore, it would be reflected as an increase in the net assets account. This is because net assets represent the difference between the assets and liabilities of a fund (similar to equity in a for-profit entity) and reflect the resources available to the fund for its operations. Cash is also affected, but it represents an asset rather than an equity account. Contributed capital and equity transfer in are not applicable in the context of governmental accounting. Other financing sources refer to non-operating inflows of resources such as borrowing or transfers from other funds, but these do not reflect a permanent capital contribution.

The General Fund of a City Made a Permanent Transfer