Which of the Statements Concerning Agency Funds Is True

question 50

Multiple Choice

Which of the statements concerning agency funds is true?

• A) Agency funds use the same basis of accounting as permanent funds.
• B) Agency funds are reported only on the statement of fiduciary net position.
• C) Agency funds use the temporary accounts Additions and Deductions.
• D) Agency funds never receive cash.

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Definitions:

Cash Payment

A transaction in which money is paid out or disbursed immediately in cash.

Fees Earned

Revenue generated from providing services, recognized when the service is performed regardless of when the payment is received.

Transactions

The exchange of goods, services, or funds between two or more parties, forming the basic activities recorded in accounting.

Parking Lot Cleaning

The service of removing trash, debris, and sometimes snow from outdoor parking areas to maintain cleanliness and safety.