Provide complete answers to the following two questions.

  1. For what types of activities are internal service funds used to account? Provide several examples. Is a government required to account for the activities you cite in an internal service fund, or may it account for them instead in its general fund?
  2. What is the rationale for accounting for nonexpendable endowment funds on a full, rather than a modified, accrual basis? Why is it important that depreciation be charged on long-term assets held as fiduciary fund investments?