Question

A special tax has been levied by the city council in a formal vote. This new revenue source has been set aside for debt service purposes in an ordinance separate from the ordinance that created the tax. This revenue source would most likely impact

1. Restricted fund balance.
2. Committed fund balance.
3. Assigned fund balance.
4. Unassigned fund balance.

Answer 1

Correct Answer:

Option(D) is correct that is unassigned fund balance. Because due to high balance in general fund and water saver fund, the fund is kept aside and it is used for unplanned project. So it will impact unassigned fund balance.

Incorrect Answers:

Option(A) is restricted fund is incorrect answer because this fund is fixed, and it can not be used or kept aside

Option(B) is committed fund is also incorrect answer because it is already passed for the certain project, so it can not be kept aside and can not be used for debt service purpose.

Option(C) is assiged fund is also incorrect answer because this fund is aready alloted to the certain project and it can not be kept aside and use for debt service purpose.

So correct answer is option (D)