Questions
Questions

SP25-BL-SPEA-V246-multisection Use of Funds Practice

Matching

The following transactions affect TWO funds. Match each transaction to the correct funds. (All fund types) 1: The fund that finances the city's day-to-day activities makes a payment to the trust fund that invests money pending payment of pensions to city employees 2: The city's electric utility sends bills to the fund that serves as a central purchasing , storage, and supply agency for all city departments. 3: To reduce the need for borrowing, the city transferred $2,000,000 from the fund that pays for day-to-day operating expenditures to the fund that accumulates resources to pay for acquiring capital assets. 4: A city ordinance decreed that all parking fine collections be placed in a separate fund and used to maintain the city zoo. Although the fines covered virtually all operating expenditures, the fund that finances day-to-day expenditures transfereed $50,000 to the separate fund so it could acquire several new animals

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The question asks us to match each transaction to the correct pair of funds, specifying the fund that the transaction originated from and the fund that received the transaction. Here are the evaluations for each item and option. Item 1: "The fund that finances the city's day-to-day activities makes a payment to the trust fund that invests money pending payment of pensions to city employees" - Correct interpretation: This is a transfer from the General Fund (finances day-to-day activities) to the Pension Fund (pension trust). The General Fund funds operations, while the Pension Fund is a separate fiduciary/ trust arrangement for pensions. Therefore, the proper pairing is General Fund → Pension Fund, i.e., General Fund, Pension Fund. - Option 1: General Fund, Pension Fund. This matches the correct direction and fund types. Item 2: "The city's electric utility sends b......Login to view full explanation

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