In the General Fund's books, a transfer received from another fund to support operating costs would be recorded as?

• A. Interfund transfer in
• B. Interfund transfer out
• C. Revenue
• D. Expenditure

Answer: (B)

Interfund transfers are internal financing moves between funds and are not treated as revenue or expenditure. When the General Fund receives a transfer from another fund to support operating costs, the General Fund records this as an inflow of interfund transfers in (financing source), increasing cash. The donor fund would record the same transaction as interfund transfers out. Revenue and expenditure accounts aren’t used for these internal transfers, since they originate from another fund within the government, not from external sources or the fund’s own operating expenses. So, in the General Fund’s books, the correct recording is interfund transfer in.