Question

A city operates a central data processing facility. The expenses of this facility would be accounted for using

A. the General Fund.
B. an Enterprise Fund.
C. a Capital Projects Fund.
D. an Agency Fund.
E. an Internal Service Fund.

Answer 1

The expenses of the city's central data processing facility would be accounted for using an Internal Service Fund.

Step-by-step explanation:

The expenses of the city's central data processing facility would be accounted for using E. an Internal Service Fund.

An Internal Service Fund is a fund used to account for the provision of goods or services by one department or agency of a government to other departments or agencies within the same government entity. It functions like a business and charges fees to cover its expenses.

In this case, the central data processing facility is providing services to other departments or agencies within the city government, so it would be accounted for using an Internal Service Fund.