Which transaction is classified as an exchange transaction?

• A. Fees charged by a municipal airport
• B. Property taxes levied
• C. Interfund transfers
• D. Grants from state government

Answer: (A)

Exchange transactions are those in which the government provides a good or service and receives something of value in return. Fees charged by a municipal airport fit this pattern: the airport delivers services to users (such as landing/takeoff facilities or terminal access) and the users pay fees in exchange, creating a direct value exchange.

Property taxes levied do not involve a direct purchase of a service in return; they are nonexchange resources raised through a levy. Interfund transfers are internal reallocations between funds and do not involve a government providing a service in return. Grants from another government are transfers of resources without a direct, reciprocal service bought from the government.