Question

Internal service funds are most commonly reported in which section of the Government-wide financial statements?

a. governmental activities.
b. business type activities.
c. both A & B.
d. neither of the above.

Answer 1

Answer: a. Governmental activities

Step-by-step explanation:

Internal Service funds in Government record entries that are related to the provision of goods and services from one government department to another on a cost reimbursement basis. The fund therefore shows the cost of providing some goods and services.

In Government-wide financial statements, it is therefore recorded under Governmental activities as it has to do with internal Government departments.