Jun 19, 2020 · 46) Which of the following should be accounted for in an internal service fund? Light poles to be paid for in installments by affected property owners $ 350,000 Van used to transport supplies to all city departments on a cost reimbursement basis 65,000 Equipment used for supplying electric power to residents 1,250,000 A) $ 65,000. B) $ 415,000.
Sep 21, 2019 · 15 . What amount of the following items should be accounted for in an internal service fund ?Warehouse equipment used to store supplies for delivery to all city departments and agencies on a cost -reimbursement basis $ 350,000 Equipment used for supplying electronic power to residents 2,100,000 Receivables for completed sidewalks to be paid for in …
accrual basis of accountingAs a proprietary fund, an internal service fund uses the total economic resources measurement focus and the accrual basis of accounting. Therefore, revenues are recognized in the accounting period in which they are earned and expenses are recognized when incurred, regardless of the timing of the related cash flows.
Internal service funds are intended to operate on taxes or other financing sources authorized by the legally enacted revenue budget for each year; therefore, they are classified as governmental funds.
Internal service funds should be used only if the reporting government is the predominant participant in the activity. Otherwise, the activity should be reported in an enterprise fund. For more information on accounting for these funds see 3.9.
Common examples of internal service include information technology, payroll, motor pool, budgeting, legal, accounting, and human resources.
How should financial information for internal service funds be reported in the government-wide financial statements? = Usually as part of governmental activities, unless the internal service fund predominantly serves one or more enterprise funds.
The rationale for the difference is that internal service funds provide services mainly to governmental funds whereas enterprise funds provide services mainly to parties external to the government.
A fund created by governments to bill back individual departments, on a cost reimbursement basis, for any activity that provides goods and services to multiple departments. • Internal Service Funds are appropriate only for activities that are intended to operate on a break-even basis over time. •Oct 1, 2019
4.3. 6.10 The internal service funds are reported in all of the proprietary fund financial statements in a separate column to the right of the total enterprise funds column. Major fund requirements do not apply to the internal service funds and their information is combined into one column.
Major Funds Major fund reporting is applied only to governmental funds (i.e., general, special revenue, debt service, capital project, and permanent funds) and enterprise funds. Internal service funds are excluded from the major fund reporting requirements.
6.10 The use of internal service funds, unless legally required, is not required by the generally accepted accounting principles (GAAP).
An Internal Service Fund typically provides services to the other funds and departments of a government, such as a motor pool or a data processing service. Enterprise funds report capital contributions separate from operating and nonoperating revenues and expenses.
They are set up to take advantage of economies of scale, to avoid duplication of effort, and to accurately identify costs of specific governmental services. An Internal Service Fund sets its rates to recover the full cost of providing a particular service.Aug 20, 2002