Multiple Choice Questions

Typical transactions can often be identified with specific types of funds. Boxer City maintains the following funds:

a. General

b. Special revenue

c. Capital projects

d. Debt service

e. Enterprise

f. Internal service

g. Permanent

h. Agency

For each of the following transactions, indicate the fund in which it would most likely be recorded:

1. The city collects $3 million of taxes on behalf of the county in which it is located.

2. It spends $4 million to pave city streets, using the proceeds of a city gasoline tax that is dedicated for road and highway improvements.

3. It receives a contribution of $5 million. Per the stipulation of the donor, the money is to be invested in marketable securities, and the interest from the securities is to be used to maintain a city park.

4. It collects $800,000 in landing fees at the city-owned airport.

5. It earns $200,000 on investments that have been set aside to make principal payments on the city’s outstanding bonds. The bonds were issued to finance improvements to the city’s tunnels and bridges.

6. It pays $4 million to a contractor for work on one of these bridges.

7. It pays $80,000 in wages and salaries to police officers.

8. It purchases, from an outside supplier, $40,000 of stationery to ‘‘sell’’ to its various operating departments.