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JAMB Principles of Accounts 1994 Question 48

Question 48

Public Sector Accounting

The receipts from a special tax levy to pay maturing interest obligation are recorded in

  1. A.Capital Project Fund
  2. B.Debt Service Fund
  3. C.Tax Assessment Fund
  4. D.Special Revenue Fund.
Show the answer and explanation

Answer: B (Debt Service Fund)

Explanation

A debt service fund collects resources, such as a special levy, to pay interest and principal on long-term debt.