What Is the Primary Reason That Governmental Entities Use Fund

question 10

Multiple Choice

What is the primary reason that governmental entities use fund accounting?

• A)Fund accounting is required by law.
• B)Fund accounting is required by GAAP.
• C)Fund accounting promotes control and accountability over restricted resources.
• D)Fund accounting promotes better control over operating activities.

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Definitions:

Income Tax Withholding

The process by which employers deduct a portion of employees' wages to pay directly to the government as prepayment for the employees' income tax liabilities.

Tax Liability

The total amount of tax owed by an individual, corporation, or other entity to a taxing authority, after deductions, credits, and exemptions.

Administrative Source

Information collected and maintained as part of the operations of administrative systems or organizations, often used for research or policy development.

Tax Law

The legal domain encompassing rules, policies, and laws that oversee the tax process, which includes charges on estates, transactions, property, income, licenses, and more.