A school district wants to establish a separate fund to acquire,store,and sell school supplies to individual schools within the district.What type of fund should it use?
A)enterprise fund
B)agency fund
C)internal service fund
D)public-purpose trust fund

Question

Quizplus · Accepted Answer

The school district wants to establish a separate fund to acquire, store, and sell school supplies, which is a typical operational function. Internal service funds are used to account for the activities of a governmental entity that provides goods or services to other departments or agencies of the government, on a cost-reimbursement basis. Therefore, an internal service fund is best suited for this purpose, as it allows the district to account for the cost of providing supplies to individual schools and charge them back accordingly. An enterprise fund would be used for a self-supporting business activity like a utility, while an agency fund is used to account for assets held by the government in a trustee capacity. A public-purpose trust fund is restricted to specific uses, usually for the benefit of individuals or organizations outside of the government.

A School District Wants to Establish a Separate Fund to Acquire,store,and