Question

A city received a grant of $5,000,000 from a private agency. The money was to be used to build a new city library. In which fund should the money be recorded for the Fund Financial Statements?

A. the General Fund.
B. an Expendable Trust Fund.
C. a Capital Projects Fund.
D. an Agency Fund.
E. a Permanent Fund.

Answer 1

The money received to build a new city library should be recorded in a Capital Projects Fund.

Step-by-step explanation:

The money received from the private agency to build a new city library should be recorded in a Capital Projects Fund for the Fund Financial Statements. Capital Projects Funds are used to account for the acquisition, construction, or improvement of major capital outlay projects, such as buildings, and are appropriate for recording the grant money for the library construction.