Question

CPA-79690 (F-09-04: Transactions and Events: Part 2)The city of Curtain had the following interfund transactions during the month of May:Billing by the internal service fund to a department financed by the general fund, for services rendered in the amount of $5,000.Transfer of $200,000 from the general fund to establish a new enterprise fund.Routine transfer of $50,000 from the general fund to the debt service fund.What was the total reciprocal interfund activity for Curtain during May?A) $5,000B) $55,000C) $200,000D) $255,00

Answer 1

Answer:

A. $5,000

Explanation:

Reciprocal interfund activity includes interfund loans and interfund services provided and used. Nonreciprocal transfers include interfund transfers to establish a new fund and routine interfund reimbursements.

Billing by the internal service fund to a department financed by the general fund for services rendered for $5,000 is the only transaction meeting the definition of a reciprocal interfund activity.