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Enterprise Funds are used to account for business-type activities that provide goods and services to...

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Accounting

Enterprise Funds are used to account for business-type activities that provide goods and services to the public for a fee. The primary source of revenue for enterprise funds comes from external customers. These funds are expected to recover their costs, including the cost of capital through the fees charged for their services. Some examples are water utilities, airports and public transportation systems. Internal service funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies within the same government entity. The primary source of revenue comes from the charges to other departments. Internal service funds are expected to generate a profit but should recover their costs from the charges to internal customers. Some examples include centralized motor pools or printing services that serve various government departments. The main difference between these types of funds is that enterprise fund is a fee for service and internal service fund is services from one department to another on a cost reimbursement basis

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