Under GASB standards, an internal service fund should prepare all of the following financial statements except a:
A) Statement of revenues, expenditures, and changes in fund balance.
B) Statement of revenues, expenses, and changes in net position.
C) Statement of net position.
D) Statement of cash flows.

Question

Quizplus · Accepted Answer

Under GASB standards, an internal service fund should not prepare a Statement of revenues, expenditures, and changes in fund balance because it operates in a manner similar to a business, and therefore, it uses accrual accounting and reports expenses, not expenditures. The correct statements for an internal service fund include a Statement of revenues, expenses, and changes in net position; a Statement of net position; and a Statement of cash flows.

Under GASB Standards, an Internal Service Fund Should Prepare All