Which of the following statements correctly identifies governmental funds?

• A. General Fund, special revenue funds, debt service funds, capital projects funds, and permanent funds
• B. Enterprise funds and internal service funds
• C. Investment trust funds
• D. Fiduciary funds

Answer: (A)

Governmental funds are the set of funds a government uses to account for most of its basic activities, and they are reported with the modified accrual basis. The five fund types that make up governmental funds are the General Fund, special revenue funds, debt service funds, capital projects funds, and permanent funds. This exact combination is what option one lists, so it correctly identifies governmental funds.

Enterprise funds and internal service funds are not governmental funds; they are proprietary funds used for business-type activities and internal support services, respectively. Investment trust funds and other fiduciary funds are fiduciary rather than governmental, held for outside parties or for specific purposes and not used to finance government programs.