Fiscal Manager Track · Module FM8

Module FM8: What You Should Know Before Moving On

The whole module in one paragraph Proprietary funds use full accrual because they rely on fees, not tax authority. Internal Service Funds bill other departments and typically land in governmental activities at the government-wide level, not business-type. Enterprise Funds serve the public directly, and GASB requires one under specific conditions, most commonly fee-backed debt. Enterprise Funds produce business-style statements, and when they run a shortfall, a General Fund transfer commonly covers it. Most Maine entities skip Internal Service Funds by organizational choice, not error, and segment information only matters once a government runs more than one significant enterprise activity.

Eight topics, eight takeaways

1. Why proprietary funds use business-style accounting
Full accrual, right at the fund level, because the funding model resembles a business.
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2. Internal service fund journal entries
Billing other departments, recorded as Revenue, full accrual.
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3. Internal service fund reporting
Typically reported within governmental activities at the government-wide level, not business-type.
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4. Enterprise vs. internal service funds
Who the customer is, and the specific conditions that make Enterprise treatment required, not optional.
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5. Enterprise fund journal entries
User fee revenue, operating expenses, and how a shortfall commonly gets covered.
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6. Enterprise fund financial statements
Net Position, Revenues/Expenses/Changes, and Cash Flows, business-style.
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7. Case: why Maine entities skip internal service funds
An organizational choice, not a compliance gap.
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8. Case: enterprise funds and segment information
A real example, and when segment disclosure actually gets triggered.
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Why this order Topic 1 sets up why proprietary funds work differently at all. Topics 2-3 cover Internal Service Funds, topics 4-6 cover Enterprise Funds, in parallel structure, entries then reporting for each. Topics 7-8 close with real cases grounding both fund types. Module FM9 shifts to fiduciary activities, the third and most distinct activity category.

Check your understanding

Before moving to FM9, take the FM8 checkpoint quiz.

Take the FM8 checkpoint quiz →