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Practice CPA®CPA FAR Practice Exam 5Question 43

Easy1 markMultiple Choice

Area I: Financial ReportingFARGovernmental Accounting

CPA · Question 43 · Area I: Financial Reporting

Under GASB, which fund would account for the activities of a municipal motor pool that charges other city departments for vehicle services on a cost-reimbursement basis?

Answer options:

A.

General Fund

B.

Enterprise Fund

C.

Internal Service Fund

D.

Special Revenue Fund

How to approach this question

Customer = Public -> Enterprise Fund. Customer = Other Gov Depts -> Internal Service Fund.

Full Answer

C.Internal Service Fund✓ Correct

Internal Service Funds account for goods/services provided by one department to other departments of the government on a cost-reimbursement basis.

Common mistakes

Confusing Enterprise and Internal Service funds.

Question 42 All questions Question 44

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