Which of the following is the best rationale/justification for reporting the business-type activities of a government in a separate fund?
A)Laws or regulations require that the activity's costs of providing services be recovered by fees and charges rather than general purpose taxes or similar charges.
B)Separate funds facilitate budgeting, planning, and controlling.
C)Separate funds facilitate the assessment of performance of the activity.
D)Separate funds facilitate the assessment of fiscal status of the activity.

Question

Quizplus · Accepted Answer

Business-type activities are reported in separate funds because laws or regulations often require that their costs be recovered through fees and charges, not general taxes, ensuring they are self-sustaining.

Which of the Following Is the Best Rationale/justification for Reporting