A Governmental Unit Establishes a Central Motor Pool to Provide

question 1

Multiple Choice

A governmental unit establishes a central motor pool to provide service to governmental departments and agencies.The pricing objective of the central motor pool is to break-even by charging all agencies a user fee.What type of fund should be established for this activity?

• A)Special Revenue Fund
• B)Agency Fund
• C)Permanent Fund
• D)Internal Service Fund

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Definitions:

Income Summary Account

A temporary ledger account used to transfer the balances of all revenue and expense accounts at the end of an accounting period to determine the net income or loss.

Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Expenses

Expenses are the costs incurred in the process of generating revenue, including operational costs, salaries, and utility expenses, critical for determining a company's net income.

Revenues

The total income generated by a company from its activities, before any expenses are deducted.