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What accounting problem arises if an Internal service fund is operated at a significant loss?
Wiki User
∙ 12y ago
If the internal service fund has positive operating income, expenditures reported in the general fund exceed the true cost of operating the government. If it is negative, the general fund understates the true cost of operating the government and net assets are effectively shifted from the internal service fund to the fund balance of the general fund.
Wiki User
∙ 12y ago
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