Which of the Following Is NOT True of Agency Funds

question 8

Multiple Choice

Which of the following is NOT true of agency funds?

• A) Governments use them to account for resources held as trustee or agent for another government, fund, not-for-profit entity, or individual.
• B) They are required to use a modified accrual basis of accounting.
• C) They have no operations and therefore are not required to prepare financial statements.
• D) Agency fund assets are always offset by liabilities.

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Definitions:

Make-to-stock

A production strategy where items are produced in large quantities and stockpiled for sale in anticipation of customer demand.

Procurement

The process of obtaining goods and services, including all activities from the identification of needs through to the receipt and approval of items.

Production

The process of creating goods and services from various resources.

TPS

A Transaction Processing System is an information system that gathers, saves, alters, and provides access to an organization's transaction data.