A7 Twatt - to provide goods and services to the general...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7 Tiffany Watt Assignment: A7 March 23, 2011 AC 325 – E01   Questions 7-2. Only when authorized by legislative approval may a city establish an internal service fund. A city’s main purpose for establishing an internal service fund is to improve financial management of scarce resources as well as to provide goods and services to other governments or departments of the same government. Enterprise funds must be established when a city finances an activity with debt that is secured solely by a pledge of the revenues from fees and charges of an activity and when laws or regulations require that the activity’s costs of providing services, including capital costs, be recovered with fees and charges, rather than with taxes or similar revenues. In addition, the main purpose of enterprise funds is
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern