Which of the Following Statements Accurately Describes Why the Statement

question 6

Multiple Choice

Which of the following statements accurately describes why the statement of revenues, expenses and changes in net position for an Internal Service Fund differs slightly from one for an Enterprise Fund?

• A) Internal Service Funds do not report operating revenue.
• B) Internal Service Funds report other financing sources and uses.
• C) Internal Service Funds do not report depreciation expense.
• D) The statement of revenues, expenses and changes in net position is formatted the same for Enterprise Funds and Internal Service Funds.

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Definitions:

Cash Payment

The act of disbursing money to settle a transaction, bill, or debt.

Principal Balance

The original sum of money borrowed in a loan or the remaining balance of a loan excluding interest.

Times Interest Earned

A ratio that measures a company's ability to meet its debt obligations based on its earnings before interest and taxes.

Net Income

The amount of money a company ultimately earns once it subtracts expenses and taxes from its gross revenue.