An Internal Service Fund Provided Services to a General Fund

question 73

Multiple Choice

An internal service fund provided services to a General Fund department. At the time of billing, the debit entry in the General Fund would be:

• A) Other Financing Sources-Transfers Out.
• B) Expenditures.
• C) Operating Revenues-Charges for Services.
• D) Expenses.

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Definitions:

Variable Production Cost

Costs that vary directly with the volume of production, including direct materials and direct labor, and sometimes variable portions of manufacturing overhead.

Stamping Machine

A machine used in manufacturing to shape or cut materials using dies and high pressure.

Constrained Resource

A factor that limits the output of a process or system, such as a machine, worker, or material that is in short supply.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and profit.