Choice "D" is correct. Interfund transfers are recorded as other financing sources (uses) rather than revenues (expenditures) for governmental funds. They are recorded simply as interfund transfers for proprietary funds. Although these transfers are not recorded as revenues or expenditures, they do affect both funds' expendable resources and, therefore, affect the results of operations for both funds.Choices "b", "a" and "c" are incorrect, per above.
