Question: need to reply below discussion with suggestions :- The purpose of the Internal Service Fund is to account for all business-related activities that has provided
need to reply below discussion with suggestions :-
The purpose of the Internal Service Fund is to account for all business-related activities that has provided goods or services to other funds, departments, or government agencies and their components. An internal service fund should be used only when the reporting government is the predominate participant in the activity, otherwise the activity should be reported as an enterprise fund. (Florida deo, n.d.). There are several advantages and disadvantages to Internal Service Fund. Some advantages are: More efficient use of resources. Allows for a more accurate accounting. some disadvantages are: Can be very complicated to understand. Disparate treatment meaning that if the cost of a good increases, then so does the rate. What I see as being compatible between for-profit and non-profit companies is that ISF uses the same accounting procedures for both. Word count 132. References: Allred, S. (2002, August 20). INTERNAL SERVICE FUNDS Cost Structure and Budget Impact. Utah Legislature. https://le.utah.gov/lfa/reports/isf_08-20-02.pdf Florida deo. (n.d.). Internal service fund. Florida Department of Education.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
