Chapter 6 Proprietary Funds

6-1. The solution to this and the first exercise of Chapters 1 through 9 will differ from student to student assuming each has a different CAFR.

6-2. Government departments purchasing goods and services from an internal service fund record expenditures equal to the revenues (not the expenses) of an internal service fund. If an internal service fund has positive operating income, then the expenditures reported in the General Fund exceed the true cost of operating the government.

if an internal service fund has negative operating income, then the expenditures reported in the General Fund understate the true cost of operating the government.

1. 6-3. Unlike internal service funds, it is frequently desirable for enterprise funds to operate at a profit...