Question

5. Which of the following is not true regarding proprietary funds? A) Enterprise funds are used by governments to account for services provided to the general public on a user-charge basis. B) General obligation bonds that will be paid from enterprise revenues must be reflected in the accounts of enterprise funds. C) Internal service

Answer 1

Answer:

The correct answer is D) The operation of internal service funds has no impact on other funds because it is run as a business and provides services that would have been purchased elsewhere by the other funds.

Explanation:

This is false because the operation of these funds represent a direct impact on other funds in the portfolio because they are related within the same business scheme and therefore transfer transactions (purchase and sale) of services corresponding to other portfolios or funds with guarantees and expectations of growth in the short term.