Which fund type is primarily used to account for social services provided by a nonprofit entity?

Special Revenue Funds are specifically designed to account for revenues that are legally restricted or dedicated to specific activities or purposes, such as social services provided by nonprofit entities. These funds receive dedicated funding sources, often from government grants, taxes, or fees intended to support particular programs like health and welfare, community development, or education initiatives.

This structure allows nonprofits to track the spending and revenues associated with social service programs distinctly from other general operations. Therefore, when a nonprofit entity provides social services, the financial activities related to these services would be recorded in a Special Revenue Fund to ensure compliance with the designated use of funds and to maintain transparency in financial reporting.

The other fund types do not serve this specific purpose. Debt Service Funds focus on the payment of long-term debt, Internal Service Funds aim to account for goods and services provided internally within a government entity, and the General Fund is used for general operations and cannot be specifically allocated to social services. Each fund type has its distinct role, reinforcing the necessity of using Special Revenue Funds for the dedicated accounting of social service programs.