A city library imposes a fee on patrons to access its electronic databases. The fee has been earmarked to maintain database subscriptions. However, city officials have the authority to redirect the fees to any public use.Should this fee be accounted for in a general fund or a special revenue fund? Why?Is the collection of the fee an exchange or nonexchange transaction? Provide an appropriate rationale for your answer.

Government funds include all types of revenues received by the government in consideration for the…

Answered: A city library imposes a fee on patrons…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A city library imposes a fee on patrons to access its electronic databases. The fee has been earmarked to maintain database subscriptions. However, city officials have the authority to redirect the fees to any public use.

Should this fee be accounted for in a general fund or a special revenue fund? Why?
Is the collection of the fee an exchange or nonexchange transaction? Provide an appropriate rationale for your answer.

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