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Which of the following statements regarding debt service funds is true? Question 66 options: A) A...

Which of the following statements regarding debt service funds is true?

Question 66 options:

A)

 A debt service fund is used only for debt service activities related to general long-term liabilities.

B)

 GASB standards require a separate debt service fund to be established for each issuance of tax-supported or special assessment debt.

C)

 Annual budgets must be prepared for debt service funds and reported in the statement of revenues, expenditures, and changes in fund balances-budget and actual.

D)

 Given the size and relevance of general long-term liabilities, debt service funds are always reported as major funds.
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Answer #1

Answer : A) A debt service fund is used only for debt service activities related to general long-term liabilities.

Explanation : Debt service funds refer to cash resources which are used to make payment of principal & interest in relation to general long-term liabilities.

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