In which of the following funds is it appropriate to record depreciation of capital assets?
A) Internal service fund.
B) Permanent fund.
C) General fund.
D) Capital projects fund.

Question

Quizplus · Accepted Answer

Internal service funds are used to provide services to other departments or funds within the same government entity. These services may include the maintenance of various capital assets such as buildings, vehicles, and equipment. Therefore, it is appropriate to record depreciation of these assets in internal service funds. The other funds listed (permanent fund, general fund, and capital projects fund) typically do not involve the ownership or maintenance of capital assets, so recording depreciation would not be necessary or appropriate.

In Which of the Following Funds Is It Appropriate to Record