Which Financial Statements Are Required for a Private Purpose Trust

question 21

Multiple Choice

Which financial statements are required for a private purpose trust fund?

• A) Statement of net position and statement of revenues, expenses and changes in net position.
• B) Statement of net position, statement of revenues, expenses, and changes in retained earnings, and statement of cash flows.
• C) Statement of net position and statement of changes in net position.
• D) Statement of net position, statement of changes in net position, and statement of cash flows.

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Definitions:

Prepaid Expense

Prepaid Expense represents payments made in advance for goods or services to be received in the future, recognized as an asset until the benefit is consumed.

Insurance Policy

A contract between an insurer and policyholder specifying the terms and conditions under which the insurer agrees to compensate the policyholder for specified losses.

Paid

Refers to the status of an account or invoice on which the due amount has been settled.

Adjusting Entry

A journal entry made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.