In short
A debt service fund is a governmental fund for resources restricted, committed or assigned to paying the principal and interest on general long-term debt.
Key takeaways
- Under the modified accrual basis, principal and interest are generally recognized as expenditures when due, not accrued.
- Money is often moved in from the general fund as a transfer.
- The debt itself is reported only in the government-wide statements.
Where it's tested
FAR: Governmental Accounting — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which governmental fund is used to account for resources accumulated to pay principal and interest on general long-term debt?