Few adjustments to internal service funds are necessary when converting from proprietary funds statements to the government-wide statements as internal service funds are generally reported as business-type activities in the government-wide statements.

Question

Quizplus · Accepted Answer

Governmental funds are adjusted for capital asset related transactions, long-term debt related transactions, converting revenues and expenses to the accrual basis, adding internal service funds and eliminating interfund activities. Most internal service funds serve primarily governmental departments and should therefore be included with the governmental activities in the government-wide statements.

Few Adjustments to Internal Service Funds Are Necessary When Converting