Question

which of the following funds is most likely to receive the proceeds of revenue bonds? group of answer choices general fund. capital project fund. city utility enterprise fund. highway department special revenue fund.

Answer 1

Revenue bonds are most likely to funnel proceeds into the city utility enterprise fund, as these bonds are used for specific projects that generate income to repay bondholders. The correct answer is option: c) city utility enterprise fund.

Step-by-step explanation:

The proceeds of revenue bonds are most likely to go into the city utility enterprise fund. Revenue bonds are typically issued by government agencies to raise capital for specific projects that generate income, such as building roads or implementing mass transit systems.

The income generated from these projects is then used to repay the bondholders. Unlike general obligation bonds, which are backed by the full faith and credit of the issuing government entity and serviced through the general fund, revenue bonds are directly tied to the revenue generated by the project.

The city utility enterprise fund, which is a self-supporting fund used to finance municipal services which charge users, is typically where the funds from revenue bonds would be directed.