A concerned citizen provides resources and establishes a trust with the local government. What factors should be considered in determining which fund to report the trust activities.
First, determine if the trust benefits the government or its citizenry. Second, determine whether the trust principal is to be maintained or expended.
1. If the trust is used to benefit the government or its citizenry, and is expendable, it is a Special revenue fund.
2. If the trust is used to benefit the government or its citizenry, and is nonexpendable, it is a permanent fund,
3. If the trust is used to benefit individuals, private organizations, or other governments, it is a Private purpose trust fund. (They are normally nonexpendable, but there is no requirement that they need to be.)
Expendable: Earnings and principal may be used for the purpose provided.
Nonexpendable: Earnings ONLY may be used for the purpose provided.
First, determine if the trust benefits the government or its citizenry. Second, determine whether the trust principal is to be maintained or expended.
ReplyDelete1. If the trust is used to benefit the government or its citizenry, and is expendable, it is a Special revenue fund.
2. If the trust is used to benefit the government or its citizenry, and is nonexpendable, it is a permanent fund,
3. If the trust is used to benefit individuals, private organizations, or other governments, it is a Private purpose trust fund. (They are normally nonexpendable, but there is no requirement that they need to be.)
Expendable: Earnings and principal may be used for the purpose provided.
Nonexpendable: Earnings ONLY may be used for the purpose provided.
I agreed with Elise.
ReplyDelete