Which of the following is true regarding internal service funds?

Question

Quizplus · Accepted Answer

Internal service funds use full accrual accounting, meaning that they record revenues when earned and expenses when incurred, regardless of when cash is received or paid. Option A is incorrect because internal service funds provide services primarily to internal users on a cost-reimbursement basis. Option B is incorrect because the budget is not typically recorded in the accounts of internal service funds. Option D is incorrect because capital assets of internal service funds are accounted for in separate capital asset accounts.

Which of the Following Is True Regarding Internal Service Funds