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.

---

Definitions:

Von Neumann-Morgenstern Utility Function

A utility function theory based on expected utility, fundamental in making rational decisions under uncertainty, emphasizing outcomes' probabilities.

Probability

The measure of the likelihood that an event will occur.

Expected Utility

A concept in economics and finance that calculates the anticipated utility of different choices, taking into account the various possible outcomes and their probabilities.

Expected Utility Function

A mathematical representation of a decision-maker's preference over uncertain outcomes, emphasizing the expected level of satisfaction or value.