An Internal Service Fund (ISF)sends bills for motor vehicle services to various departments that receive appropriations from the General Fund.When it sends the bills out,which account should the ISF credit?
A)due from general fund
B)other financing sources - motor vehicle services
C)revenues - motor vehicle services
D)expenditures - motor vehicle costs

Question

Quizplus · Accepted Answer

The Internal Service Fund (ISF) is receiving payments for providing motor vehicle services to the various departments. As per accounting principles, the revenue generated by the ISF should be credited to the "revenues - motor vehicle services" account. This account is classified as an income account in the income statement, which shows the revenue generated by the ISF for the services provided. Options A and B are not correct since the ISF is not due any money from the General Fund, but rather it is receiving bills for service. Option D is incorrect since it is an expenditure account that records the cost of providing motor vehicle services, not the revenue generated from it.

An Internal Service Fund (ISF)sends Bills for Motor Vehicle Services