Exam 11: Internal Service Funds

Internal Service Funds may report each of the following net position classifications except

A self-insurance Internal Service Fund may $\textbf{ not }$ include which of the following in its charges to other funds?

The Central Warehouse Internal Service Fund purchased $15,000 of inventory on account, which was unpaid as of the month end. Which of the following statements regarding the accounting for the transaction is false?

Transfers from an Internal Service fund to another fund are reported in the Internal Service Fund's Statement of Cash Flows as

An Internal Service Fund is considered to be

Caraway County has a Self-Insurance Internal Service Fund. If the fund purchases $100,000 of investments during the month, the

Nathan Township's General Fund transfers three vehicles to the Internal Service Fund. The vehicles, which have a useful life of five years, are transferred at the end of their fourth year. The original cost for all three vehicles totaled $75,000. The entry in the Internal Service Fund would be Debit Credit A. Vehicles. \7 5,000 Accumulated Depreciation - Vehicles \6 0,000 Net Investment in Capital Assets 15,000 B. Vehicles. \7 5,000 Accumulated Depreciation - Vehicles \6 0,000 Capital Contributions 15,000 C. Vehicles. \1 5,000 Capital Contributions \1 5,000 D. Vehicles. \7 5,000 Accumulated Depreciation - Vehicles \6 0,000 Transfer from General Fund 15,000

According to GAAP, Only City's Transportation Services Internal Service Fund must present which financial statements? I. A Statement of Net Position II. A Statement of Revenues, Expenditures, and Changes in Fund Net Position III. A Statement of Revenues, Expenses, and Changes in Fund Net Position IV. A Statement of Cash Flows

A Motor Pool Internal Service Fund purchased ten new vehicles for their fleet inventory. The fund entered into a capital lease. The capitalizable cost totaled $300,000 and there was a $50,000 down payment. The entry to record the transaction in the Internal Service Fund would be Debit Credit A. Vehicles. \3 00,000 Expenditures. 50,000 Other Financing Source - Capital Lease \3 00,000 Cash 50,000 B. Vehicles. \3 00,000 Other Financing Source - Capital Lease \2 50,000 Cash 50,000 C. Vehicles. \3 00,000 Capital Lease Payable \2 50,000 Cash 50,000 D. Vehicles. \2 50,000 Expenditures. 50,000 Capital Lease Payable \2 50,000 Cash 50,000

Inventory in an Internal Service Fund would most likely be reflected in which of the following net position classifications?

Interest revenue earned by an Internal Service Fund will be reported on the statement of revenues, expenses, and changes in net position as

Five sections for reporting items in an Internal Service Fund Statement of Cash Flows prepared using the direct method (excluding the reconciliation of operating income to cash flows from operations) are: A. Operating Activities B. Noncapital Financing Activities C. Capital and Related Financing Activities D. Investing Activities E. Noncash Financing and Investing Activities Using these five sections, indicate in which section each of the following Internal Service Fund transactions should be reported. If a transaction should not be reported on the Statement of Cash Flows, indicate it using the letter "X". 1. Purchase of an Internal Service Fund capital asset for cash. 2. Providing services to other funds on a cash basis. 3. Issuing refunding bonds to refinance bonds issued 10 years ago to provide financing for capital asset acquisitions. 4. Sale of Internal Service Fund capital assets for cash. 5. Transfer from a Special Revenue Fund for the specific purpose of financing an Internal Service Fund capital asset purchase. 6. Payment of office workers' salaries. 7. Amortization of the Deferred Interest Expense Adjustment created when the capital asset debt was refunded. 8. Transfer to a Capital Projects Fund to provide financing for a general government capital asset construction project. 9. Purchases of investments with cash received from issuing bonds to finance construction of Internal Service Fund capital assets. 10. Transfer to the General Fund for the purpose of financing specific operating costs of a department accounted for in that fund. 11. Issuing bonds to provide operating cash for the Internal Service Fund. 12. Signing a capital lease for equipment to be used by activities accounted for in the Internal Service Fund. 13. Interest received during the year earned on investments. 14. Transfer the proceeds from the sale of an Internal Service Fund capital asset to the General Fund. 15. Depreciation on Internal Service Fund capital assets. 16. Proceeds of bonds issued to finance construction of Internal Service Fund capital assets. 17. Interest paid on bonds issued to finance construction of an Internal Service Fund capital asset. 18. Principal retirement payments on bonds issued to finance construction of Internal Service Fund capital assets 19. Unrealized gain on investments held at year end. 20. Receipt of a capital grant for an ongoing Internal Service Fund capital asset construction project.

An Internal Service Fund billed other departments $1,200,000 for services provided during the year. Expenses of $700,000 for salaries, $250,000 for supplies and materials used, $100,000 for depreciation, and $100,000 for interest expenses were incurred. The fund received a $42,000 transfer from the General Fund during the year. The Internal Service Fund should report operating income for the year of

The use of an Internal Service Fund is mandated by generally accepted accounting principles for which of the following activities?

The accounts listed below are taken from an Internal Service Fund adjusted trial balance (all amounts are in thousands): Requirements: Prepare Statement of Fund Net Position and Statement of Revenues, Expenses, and Changes in Fund Net Position for the year ended June 30, 20X3, for the City of Bell Buckle.

An Internal Service Fund had investments with an original cost of $100,000. As of the end of the fiscal year, the fair market value on these investments was $85,000. The Internal Service Fund would

The General Fund paid $4,000 to the Internal Service Fund for services rendered. Which of the following statements accurately reflects the reporting effects of the transaction?

The General Fund contributes $40,000 to an Internal Service Fund to subsidize the purchase of a capital asset. The contribution is not considered to be an interfund loan. The Internal Service Fund will report this contribution as a

The General Fund contributes $40,000 to an Internal Service Fund to subsidize its operations. The contribution is not considered to be an interfund loan. The Internal Service Fund will report this contribution as a