In the transaction where the General Fund services the Special Revenue Fund, which entry reflects this reimbursement?

In this scenario, the General Fund is providing a service to the Special Revenue Fund and is being reimbursed for that service. The correct entry involves recognizing the expenditure on the part of the Special Revenue Fund, as it is the fund that actually incurred the cost.

When the Special Revenue Fund receives a service and subsequently makes reimbursement to the General Fund, the expenditure must be recorded in the Special Revenue Fund. This is because the Special Revenue Fund is responsible for the costs associated with its operations. Therefore, an entry is made to debit the Expenditure account in the Special Revenue Fund, reflecting the cost incurred for the services it has received. Concurrently, the cash that is used to make the reimbursement is credited to reflect the outflow of resources from the Special Revenue Fund to the General Fund.

This entry effectively captures the financial impact of the transaction, showing that the Special Revenue Fund is accountable for its expenses and ensuring that the General Fund properly receives the cash payment for the services rendered.