Proprietary Funds and FS

Question 1

What is JE for a quasi-external transactions?

Answer 1

Dr. Due from other funds
Cr. Operating revenue

Question 2

what accounting method is used for proprietary funds?

Answer 2

These fund operates for profit so full accrual

Question 3

what is internal service fund?

Answer 3

• It is a proprietary fund and it accounts for providing good and services by one department to other departments on cost-reimbursement basis
• It serves internally to itself or other governments

Question 4

what are the financial statements of proprietary funds?

Answer 4

• BS: statement of net position
• IS: statement of revenues, expenses, and changes in net position
• statement of cash flows
• footnotes

Question 5

what is enterprise fund?

Answer 5

• It serves external customers
  any of the 3 criteria is met:
• activities financed with debt that is secured solely by a pledge of the net revenue from fees and charges
• authority of laws and regulations that the cost of providing services be recovered through fees
• pricing policies established fees and charges designed to recover its costs