Which fund accounts for resources restricted for a specific purpose other than capital projects or debt service?

Which fund accounts for resources restricted for a specific purpose other than capital projects or debt service?

• A. Special Revenue Fund
• B. General Fund
• C. Capital Projects Fund
• D. Debt Service Fund

Answer: (A)

Resources restricted for a specific purpose other than capital projects or debt service are accounted for in the Special Revenue Fund. This fund type exists to hold and spend money that has been set aside for a particular activity or program, but not for capital projects or debt obligations. For example, a grant received to fund police equipment, a portion of fines earmarked for street maintenance, or a dedicated tax revenue for library services would be tracked in the Special Revenue Fund to ensure those restricted resources are used only for their designated purpose. In contrast, the General Fund covers ongoing operations not restricted to a specific program, the Capital Projects Fund handles money for major capital expenditures, and the Debt Service Fund accumulates resources to pay interest and principal on long-term debt. Hence, the Special Revenue Fund best fits the scenario described.

Resources restricted for a specific purpose other than capital projects or debt service are accounted for in the Special Revenue Fund. This fund type exists to hold and spend money that has been set aside for a particular activity or program, but not for capital projects or debt obligations. For example, a grant received to fund police equipment, a portion of fines earmarked for street maintenance, or a dedicated tax revenue for library services would be tracked in the Special Revenue Fund to ensure those restricted resources are used only for their designated purpose. In contrast, the General Fund covers ongoing operations not restricted to a specific program, the Capital Projects Fund handles money for major capital expenditures, and the Debt Service Fund accumulates resources to pay interest and principal on long-term debt. Hence, the Special Revenue Fund best fits the scenario described.