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Unformatted text preview: to provide goods and services to the general public. 7-4. One of the more important considerations in establishing a pricing policy for an internal service fund is cost. For example, historical cost can present issues because it will not provide sufficient revenue to replace supplies issued if replacement prices have risen since the last purchase or to increase the inventory quantities if the scale of governmental operations is growing. Another issue to take into consideration is whether the fund has received a loan from another fund or another government. If it has, then the prices must be set at a level that will generate cash needed for debt retirement. Exercises & Problems 6-2. Multiple Choice. 1. B 2. D 3. B 4. C 5. B 6. A 7. A 8. D 9. D 10. C...
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- Spring '11