In case of inter-fund loan, the loan has to be repaid usually within a year or before the end of the fiscal period. Loans and advances are not shown on a fund’s statement of revenue, expenditure and changes in fund balance; however, all outstanding loans and advances have to be shown on the balance sheet as payable or receivable. Interest usually is not charged on inter-fund financing arrangements. If interest is charged, it’s accounted for in the funds in the same manner as for other interest income or expense. The general fund agrees to lend the enterprise fund $2,000 for three months. How this inter-fund loan is reported on the general fund financial statements?

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Chapter 17, Problem 17.14Q

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Introduction: In case of inter-fund loan, the loan has to be repaid usually within a year or before the end of the fiscal period. Loans and advances are not shown on a fund’s statement of revenue, expenditure and changes in fund balance; however, all outstanding loans and advances have to be shown on the balance sheet as payable or receivable.

Interest usually is not charged on inter-fund financing arrangements. If interest is charged, it’s accounted for in the funds in the same manner as for other interest income or expense.

The general fund agrees to lend the enterprise fund $2,000 for three months. How this inter-fund loan is reported on the general fund financial statements?

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