Choice "C" is correct. Internal service funds are proprietary funds that use the economic resources measurement focus that includes capitalization of assets and income determination. They used the accrual basis of accounting and recognize depreciation expense.Choice "b" is incorrect. Capital projects funds are governmental funds that use the current financial resources measurement focus that excludes capitalization of assets. They use the modified accrual basis of accounting and do not recognize any expenditure for depreciation.Choice "d" is incorrect. Debt service funds are governmental funds that use the current financial resources measurement focus that excludes capitalization of assets. They use the modified accrual basis of accounting and do not recognize any expenditure for depreciation.Choice "a" is incorrect. Special revenue funds are governmental funds that use the current financial resources measurement focus that excludes capitalization of assets. They use the modified accrual basis of accounting and do not recognize any expenditure for depreciation.