Final answer:
The accrual basis of accounting is used for internal service funds within governmental entities, reflecting their business-like operations.
Step-by-step explanation:
The accrual basis of accounting is used for several governmental entities, including the General Fund, Special Revenue Funds, Internal Service Funds, Debt Service Funds, and the Capital Projects Fund. In the General Fund, the accrual basis of accounting is used to record revenues and expenses.
When they are earned or incurred, regardless of when the cash is received or paid. This provides a more accurate representation of the financial activities of the government. In Special Revenue Funds, Internal Service Funds, Debt Service Funds, and the Capital Projects Fund.
The accrual basis of accounting is used to ensure that revenues and expenses are properly matched and recorded in the period they relate to, even if the cash is received or paid in a different period.