F10 - M1 - Proprietary Funds Financial Statements

Question 1

__________ funds primarily serve other funds or departments within the government (internal customers).

Answer 1

Internal service (IS)

Question 2

The financial statements of an IS fund are

Answer 2

1) the statement of net position; 2) a statement of revenues, expenses, and changes in net position; and 3) a statement of cash flows.

Question 3

__________ are used to account for operations that are financed or operated in a manner similar to private business enterprise.

Answer 3

Enterprise funds

Question 4

Activities are recorded in the enterprise fund if any of the following criteria are met (3)

Answer 4

1) the activity is financed with debt that is secured solely by a pledge of the net revenue from fees and charges;
2) laws and regulations require that the cost of providing services be recovered through fees; or
3) the pricing policies of the activity establish fees and charges designed to recover its costs.

Question 5

The enterprise and internal service funds are distinguished by their _______ ; enterprise funds serve ______ customers and internal service funds serve _______________

Answer 5

by their customer; external customers; the government.