Carlisle established a motor vehicle service and maintenance fund to service and maintain all cars and trucks owned by the town. Revenues of the fund will only come from billings to the funds which use the motor vehicle service and maintenance fund. What type of fund is the motor vehicle service and maintenance fund?

The correct answer is: Internal service fund.

Explanation:

Internal service funds are used by governmental accounting for activities that provide goods or services to other funds, departments or bureaus of the government. Under this approach, profits are reported in the accounting period when they were earned and expenses are recorded when incurred.