Internal service funds account for operating expenses on the accrual basis of accounting.

Name: Internal service funds account for operating expenses on the accrual basis of accounting.
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Question

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Internal service funds are used to account for services provided by one department or agency to other departments or agencies within the same government entity. These funds are accounted for on the accrual basis of accounting, meaning that expenses are recognized when incurred, rather than when cash is paid out.

Internal Service Funds Account for Operating Expenses on the Accrual