Question

The Township of Spring Lake, NJ’s General Fund prepared and invoiced the Spring Lake Water Department, an enterprise fund, for the fair value of the cost of providing services. In the General Fund, this billing is called:

A. An in-kind contribution.

B. An exchange revenue.

C. A general revenue.

D. A payment in lieu of taxes.

Special revenues fund does not have which of the following:

A. Economic resources focus.

B. Modified Accrual.

C. Fiscal Accountability.

D. Prepares a balance sheet.

The special revenues fund:

A. Is an enterprise fund.

B. Is a clearinghouse fund.

C. Is where grant monies and other revenues are collected for specific purposes.

D. Is not a governmental fund.

Answer 1

1 B. An exchange revenue.

Explanation: Both the funds, general and enterprise, belongs to the government. The flow of funds here takes place from one fund to another therefore its called an exchange revenue.

2. D. Prepares a balance sheet.

Explanation: Special revenue funds does not prepare a balancesheet. Instead, they are included in government's balance sheet along with other funds like general fund, capital project funds, etc.

3. C. Is where grant monies and other revenues are collected for specific purposes.

Explanation: A special revenue fund is an account established by a government to collect money that must be used for a specific project.