Question

A local government sells bonds having a face value of $1,000,000 at par. The bond proceeds will be accounted for in a Capital Projects Fund. What account will be credited to offset the debit to cash?

Answer 1

Answer:

A) Other financing sources

Explanation:

Other financing sources and uses account has to be created to include operating transfers and proceeds from debt transactions. Since the issuing of bonds is a debt transaction, their proceeds must be included in this account. This account can only be used to record non-operating revenues and expenditures.