Which of the following funds are proprietary funds?
The proprietary funds in governmental accounting are enterprise funds and internal service funds.
Enterprise Funds
Enterprise funds are used for business-like activities that provide goods or services to the public on a fee basis. These funds operate similarly to private businesses, generating revenue from their operations. Examples of enterprise funds include water utilities, parking garages, and golf courses. These funds are self-sustaining and are accounted for separately from other government funds.
Internal Service Funds
Internal service funds are used for activities that primarily benefit other departments within the same government. These funds provide centralized services such as information technology, fleet maintenance, or human resources to various departments of the government. They operate on a cost-reimbursement basis, charging fees to the departments they serve for the services provided.
Non-proprietary Funds
Investment trust funds and pension trust funds are not proprietary funds. Investment trust funds are used to account for the investments of external parties. These funds are managed by the government but the assets belong to individuals or organizations outside of the government entity. Pension trust funds are used to account for pension benefits payable to government employees.
The general fund is also not a proprietary fund. The general fund is used to account for general revenues and expenditures of a government. It is the primary operating fund of the government and includes revenues such as taxes, grants, and fines, as well as expenditures for services such as public safety, education, and healthcare.
In conclusion, the proprietary funds in governmental accounting are enterprise funds and internal service funds. These funds serve specific purposes within the government and play a vital role in ensuring the efficient delivery of goods and services to the public and other government departments.