Which of the following funds of a City government uses the Accrual Basis of accounting and the Economic Resources Measurement Focus?

Answer options:

General Fund

Capital Projects Fund

Internal Service Fund

Debt Service Fund

How to approach this question

Governmental Funds (GRaSPP) = Modified Accrual. Proprietary (SE) and Fiduciary (CIPPOE) = Full Accrual.

Full Answer

C.Internal Service Fund✓ Correct

Internal Service Funds are Proprietary funds. They operate like businesses (charging other departments) and thus use full accrual accounting to match revenues and expenses.

Common mistakes

Thinking all government funds use modified accrual.

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