Proprietary funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government's ongoing organizations and activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for revenues that have been legally restricted as to expenditure.

Question

Quizplus · Accepted Answer

Proprietary funds are used to account for a government's ongoing organizations and activities that are similar to those operated by for-profit organizations, such as a water utility or a transportation system. They are considered proprietary because they operate on a self-supporting basis, generating revenue from the sale of goods or services. Unlike governmental funds, proprietary funds are accounted for on an accrual basis and include a statement of net position and a statement of revenues, expenses, and changes in net position.

Proprietary Funds Are