Which of the following correctly defines a proprietary fund?

A proprietary fund is fundamentally defined by its purpose of accounting for business-like activities that are intended to be self-supporting through user fees or charges. This type of fund facilitates the reporting of activities that operate similarly to private enterprises, meaning they generate revenue through providing goods or services. The focus of proprietary funds is on cost recovery, which distinguishes them from governmental funds that primarily account for taxes and grants.

A significant characteristic of proprietary funds is their aim to minimize reliance on public financing, thereby promoting efficient operation and accountability, just as a private business would. This structure allows municipalities or governments to track the financial performance of certain services, such as water utilities or public transportation, providing insights into their operational viability and sustainability.

The other choices do not accurately represent the purpose or characteristics of a proprietary fund. Rather than serving governmental administrative costs or all governmental revenues, proprietary funds are narrowly focused on specific operations that resemble business transactions. Additionally, they do not align with capital project funds, which are specifically concerned with financing large construction or infrastructure projects.