True/False Questions
1.Proprietary funds use the modified accrual basis of accounting.
2.Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.
3.Internal Service Funds account for activities that produce goods or services to be provided to outside customers on a cost reimbursement basis.
4.Enterprise funds are used to account for activities similar to those engaged in profit-seeking businesses.
5.Financial statements for proprietary funds are prepared using the economic resources measurement focus.
6.Budgetary comparison schedules arenot
required for proprietary funds.
7.An enterprise fund should be used when the government has a policy to establish fees to cover the costs of providing services for an activity.
8.An enterprise fund should be used when debt is back solely by fees and charges
9.An enterprise fund should be used when a legal requirement exists that the cost of providing services are to be recovered through fees or charges.
10.Proprietary Funds use the accrual basis of accounting.
1