Exam 11: Internal Service Funds

The Tullahoma School District's Print Shop Internal Service Fund received $25,000 from a state grant to help subsidize the purchase of new printing equipment. The Internal Service Fund will report this contribution as a

If a government has more than one Internal Service Fund, they are reported in the basic financial statements

A self-insurance activity that is accounted for in an Internal Service Fund pays $365,000 in claims during the year. Because the Internal Service Fund is a proprietary fund, the claims will be reported on the statement of revenues, expenses, and change in net position as

If a Self-Insurance Internal Service Fund pays claims of $5,000 during the month, the fund will report

Assume that an Internal Service Fund purchases land on which to construct a new warehousing facility. The fund paid cash for 30% of the purchase price and financed the reminder with a loan from a local lending institution. The Internal Service Fund will

Which of the following statements accurately describes why the statement of revenues, expenses and changes in net position for an Internal Service Fund differs slightly from one for an Enterprise Fund?

Cash paid to purchase capital assets is reported as a cash outflow in which section of an Internal Service Fund statement of cash flows?

The General Fund transfers cash to provide working capital for a new Internal Service Fund. The Internal Service Fund would report this transaction in the statement of cash flows as

A government plans to create an Internal Service Fund to account for its new central warehouse. The General Fund loans the Internal Service Fund $100,000, which is going to pay back the loan interest-free in five years. The entry in the Internal Service Fund to record this transaction would be Debit Credit A. Cash \1 00,000 Revenue \1 00,000 B. Cash \1 00,000 Capital Contribution \1 00,000 C. Cash \1 00,000 Transfer from General Fund \1 00,000 D. Cash \1 00,000 Advance finm General Find \1 00,000

Governments that centralize their risk financing activities should not account for this activity in which type of fund?

Which of the following would most likely be accounted for in an Internal Service Fund?

Listed below are selected transactions for the Maury County Internal Service Fund. $\underline{\text{ Transactions: }}$ 1. Purchased a building on January 2, 20X2, by paying $100,000 down and borrowing $350,000 on a 6%, 10-year mortgage. Assume semi-annual mortgage payments are due each June 30 and December 31, beginning this year. The building will be depreciated over 20 years with no salvage value using the straight-line method. 2. Purchased supplies on account, $58,000. The fund uses the perpetual inventory method when accounting for supplies. 3. Paid employee salaries, $120,000. Accrued salaries at year end were $13,000. Accrued salaries at the beginning of the year were $9,000. 4. Billed General Fund departments $400,000 for services provided to those departments. Billings to the Enterprise Fund totaled $30,000. 90% of these billings were collected by year end. The remaining 10% is not expected to be collected from the other funds until the second quarter of the next fiscal year. 5. The first semi-annual mortgage payment of $23,500 was made. 6. Paid $50,000 on account. 7. Supplies on hand at year end have a cost of $4,000. The beginning of the year inventory was $6,000. 8. The second semi-annual mortgage payment of $23,500 was made. 9. Record depreciation on the building for the year. $\underline{\text{Requirements: }}$ 1. Prepare the journal entries required in the Internal Service Fund. If no entry is required, state "No entry required" and explain why. 2. Indicate the effects of each transaction on the accounting equation of the Internal Service Fund accounts. If an element of the equation is not affected or if the net effect is zero, put "NE" in the appropriate box. Do not leave any boxes blank.

In an Internal Service Fund, the expectation is that

Which measurement focus and basis of accounting should an Internal Service Fund use? $\underline{\text{Measurement Focus }}$        $\underline{\text{ Basis of Accounting }}$

The General Fund transfers cash to provide working capital for a new Internal Service Fund. The Internal Service Fund would report this transaction in the operating statement as

A municipality's Central Garage Internal Service Fund had total billings for $8,000 for the month. Of the 40 vehicles serviced, 20 were police vehicles, 10 were water department vehicles, and 10 were wastewater department vehicles. What would the journal entry be to account for this transaction? Debit Credit A. Accounts Receivable \8 ,000 Transfer from Other Funds \8 ,000 B. Accounts Receivable \8 ,000 Revenues-Charges for Services. \8 ,000 C. Due from General Fund \4 ,000 Due from Water Fund 2,000 Due from Wastewater Fund 2,000 Revenues-Charges for Services \8 ,000 D. Due from General Fund \4 ,000 Due from Water Fund 2,000 Due from Wastewater Fund 2,000 Transfer from Other Funds \8 ,000

An Internal Service Fund would report which of the following items on its balance sheet

The Tullahoma School District's Print Shop Internal Service Fund received $25,000 from a state grant to help subsidize its printing operations. The Internal Service Fund will report this contribution as a

Which of the following accounts would potentially appear on both an Internal Service Fund statement of net position and a General Fund balance sheet?

The required statements for an Internal Service Fund include a Statement of