Internal Service Funds typically follow a flow of funds orientation, while Enterprise Funds use an income determination orientation. The correct answer is d. Income determination, Income determination for the respective fund types.
The orientation of accounting and reporting for internal service funds and enterprise funds can be characterized by either the flow of funds or income determination. Internal service funds, which are used to account for the financing of goods or services provided by one department or agency to other departments or agencies within a governmental entity, typically adopt a flow of funds orientation. In contrast, enterprise funds, which account for operations that are financed and operated in a manner similar to private business enterprises where the intent is to make a profit from fees charged for services, use an income determination orientation.
Therefore, the correct answer to the question is:
- d. Income determination for Internal Service Funds
- Income determination for Enterprise Funds