This Fund Accounts for Activities That Produce Goods or Services

question 112

Multiple Choice

This fund accounts for activities that produce goods or services to be provided to other departments or other governmental units.

• A) Enterprise fund.
• B) Internal Service fund.
• C) Special Revenue fund.
• D) Debt Service fund.

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Definitions:

Income Summary

An account used in the closing process that summarizes revenues and expenses for a period, transferring the net amount to retained earnings.

Sales Returns

Transactions where customers return defective, unsatisfactory or unwanted products back to the seller, resulting in a reversal of revenue.

Accounts Receivable

Financial obligations of customers towards a business for delivered but unpaid goods or services.

Operating Cycle

The duration of time it takes for a company to buy inventory, sell it to customers, and collect the cash from sales.