Problem 2: true/false questions 13. The large deficit in Chicago's revolving funds was due to an accounting systems problem that resulted in bills not being sent to user departments for services rendered. 14. Internal service funds can obtain long-term financing by issuing either revenue bonds or general obligation bonds. 15. Enterprise funds report bad debt expense in the operating expenses section of the statement of revenues, expenses, and changes in net position. 16. On an enterprise fund's statement of net position, the amount reported for restricted net position can be based upon a constraint imposed by the governing body of the local government. 17. On the proprietary fund financial statements, internal service funds are reported under the heading of governmental activities. 18. If cash flows from operating activities are not large enough to sustain the operations of an enterprise fund, the cash to sustain the operations must come from selling investments and capital assets. 19. On the proprietary funds statement of cash flows, GASB allows local and state governments the option to report cash flows from operating activities either directly or indirectly. 20. When the water utility bills the police department for water usage, the water utility debits "customer accounts receivable" for the amount of the billing.