Question

describe a government provided service and which fund category it would be classified

Answer 1

An Internal Service fund are the funds which are established to account for any activity that gives goods or services to other funds, agencies or departments of the primary government and its component units, or to other governments, on a cost-reimbursement basis, with the target to 'break-even' instead of making profits. These would be classified as a proprietary fund. A proprietary fund is used to account for an ongoing company a government’s business-like interactions, either within the government or outside of it. The two types of proprietary funds are internal service funds and enterprise funds.