Typically, proceeds from general obligation bonds will be recorded in the:

• A. Capital projects fund.
• B. Debt service fund.
• C. General fund.
• D. Enterprise fund.

Answer: (A)

In government fund accounting, proceeds from general obligation bonds are a financing source used to fund capital projects. The Capital Projects Fund is the dedicated account for resources to acquire, construct, or finance major capital facilities, so bond proceeds are recorded there as an other financing source and then used to fund the capital expenditures. The Debt Service Fund is reserved for accumulating resources to pay debt principal and interest, not for financing the construction itself. The General Fund handles everyday operating activities, not long-term capital financing, and the Enterprise Fund is for business-type activities funded by user charges. Thus, the proceeds belong in the Capital Projects Fund.