Which of the Following Is NOT True About Internal Service

question 12

Multiple Choice

Which of the following is NOT true about internal service funds as reported in the fund financial statements?

• A) Costs reported by internal service funds are reported twice within the same set of financial statements.
• B) Billing rates must be set to cover the full cost of providing the goods or services.
• C) Depreciation can be charged to governmental funds through the billing rates established by the internal service fund.
• D) Deficits or surpluses in the general fund can be transferred to the internal service fund by adjusting the billing rates.

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Definitions:

TPS

Acronym for Transaction Processing Systems, which are software and hardware systems designed for processing business transactions efficiently and accurately.

Audits

Inspections or examinations of accounts, records, or processes to assess compliance with established standards or regulations.

Interorganizational

Describes interactions or relationships that occur between two or more organizations, often involving coordination and cooperation in achieving mutual goals.

Intraorganizational

Pertaining to activities, communication, and interactions that occur within the same organization.