A state constructs an office building.The construction is financed with: (1)a transfer of $1 million from the General Fund; (2)a grant of $2 million from the federal government; (3)bond proceeds of $7 million;and (4)earnings of $100,000 from temporary investment of bond proceeds.All transactions occur in one year.
-Based on the preceding set of facts,what should be reported in the financial statements of the General Fund for the year?

Question

Quizplus · Accepted Answer

The correct answer is A because the transfer of $1 million from the General Fund to finance the construction of the office building would be reported as other financing uses in the General Fund's financial statements. This reflects the outflow of resources from the General Fund to another fund or purpose. The other options involve transactions that would not be reported in the General Fund's financial statements in the manner described.

A State Constructs an Office Building