Which account would be credited in the internal service fund when funds are transferred in from another fund for interfund purposes?

• A. Interfund Transfer In
• B. Interfund Transfer Out
• C. Due From Other Funds
• D. Interfund Payable

Answer: (A)

Interfund transfers are not revenues or expenses; they are internal reallocations of resources between funds. When funds move into an internal service fund from another fund, the receiving fund records the inflow as an interfund financing source. That inflow is shown by crediting Interfund Transfer In (with a corresponding debit to cash), reflecting the source of funds from the other fund. The other options don’t fit this context: a transfer out would be recorded in the sending fund, a receipt would not typically be booked as a Due From Other Funds in this situation, and Interfund Payable represents a liability concept that isn’t the standard entry for a straightforward interfund transfer into the internal service fund.