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State Whether These Statements Are True or False

Question 13

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State whether these statements are true or false.Discuss why the false statements are false.

Premises:
Enterprise Funds provide services primarily to governmental departments and agencies.
As a general rule,Internal Service Funds sell goods and services to governmental agencies,and Enterprise Funds sell goods and services to the general public.This means an Enterprise Fund cannot sell some goods and services to the government itself.
Enterprise Funds are financed primarily through user charges.
Enterprise Funds use a different basis of accounting than Internal Service Funds.
Enterprise Funds may receive subsidies from the General Fund for operating purposes.
Responses:
False
True

Correct Answer:

Enterprise Funds provide services primarily to governmental departments and agencies.
As a general rule,Internal Service Funds sell goods and services to governmental agencies,and Enterprise Funds sell goods and services to the general public.This means an Enterprise Fund cannot sell some goods and services to the government itself.
Enterprise Funds are financed primarily through user charges.
Enterprise Funds use a different basis of accounting than Internal Service Funds.
Enterprise Funds may receive subsidies from the General Fund for operating purposes.
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