Which fund is specifically set aside for the repayment of debt?

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The Debt Service Fund is specifically designated for the repayment of debt obligations, such as principal and interest on bonds or loans. This fund ensures that the necessary resources are available to meet scheduled payments, thus maintaining the creditworthiness of the entity involved. It is an essential tool in public finance management, helping jurisdictions manage their financial commitments responsibly and effectively.

The General Fund, on the other hand, is used for the overall operations of the government and does not focus solely on debt repayment. The Special Revenue Fund is meant for specific purposes and programs funded by designated revenues, which are not primarily concerned with debt service. Lastly, the Capital Projects Fund is utilized for acquiring or constructing long-term assets but does not specifically address debt repayment. Therefore, the Debt Service Fund is the only option that exclusively caters to managing and repaying debt liabilities.

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