A Statement of Revenues,expenses,and Changes in Net Assets for an Internal

question 73

True/False

A statement of revenues,expenses,and changes in net assets for an internal service fund is similar in many respects to an income statement prepared for an investor-owned business.

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Definitions:

Operating Activities

Transactions and events that affect net income, primarily related to the core operations of a business.

Direct Method

An approach to cash flow statement preparation that lists major classes of gross cash receipts and payments.

Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, reflecting wear and tear.

Operating Activities

Activities that are directly related to running a business and generating revenue, such as sales and purchasing materials.