Which of the following is an appropriate objective of an Internal Service Fund?
A)accounting for the full costs of services,including depreciation of capital assets,to provide a basis for charging governmental users
B)providing services to other governmental agencies without charge
C)temporarily holding tax resources on behalf of another government
D)accounting for the full costs of providing services to the general public

Question

Quizplus · Accepted Answer

Internal Service Funds are used to account for activities provided by one department or agency to other departments or agencies within the same government. The appropriate objective of an Internal Service Fund is to account for the full costs of services, including depreciation of capital assets, to provide a basis for charging governmental users. This ensures that the users of the services are charged the full cost of providing the service, which helps to promote efficiency and accountability. Option B is incorrect because providing services to other governmental agencies without charge is not consistent with an Internal Service Fund. Option C is incorrect because temporarily holding tax resources on behalf of another government would be more appropriately accounted for in a Trust Fund. Option D is incorrect because an Internal Service Fund is typically used for activities provided to other government agencies, not the general public.

Which of the Following Is an Appropriate Objective of an Internal