When a Contributor and a Government Agree That the Principle

question 105

True/False

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals, organizations, or other governments, an agency trust fund has been formed.

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Definitions:

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset’s book value declines compared to straight-line depreciation.

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life.

Depreciation Tax Shield

The reduction in taxes due to depreciation’s reducing taxable income.

Net Operating Cash Flows

The amount of cash that a company generates from its normal business operations after subtracting operating expenses.