Which of the Following Is Not Correct Regarding Government Trust

question 51

Multiple Choice

Which of the following is not correct regarding Government Trust Accounting?

• A) If a trust is to benefit the government or its citizenry, it should be accounted for in a special revenue or permanent fund.
• B) If a trust is to benefit individuals, private organizations, or other governments, it should be accounted for in a private-purpose trust fund.
• C) The journal entry to establish a permanent fund would include a credit to Fund Balance - Restricted.
• D) Trust funds accounted for in a permanent fund use modified accrual accounting.

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Definitions:

Firm's Owners

Individuals or entities that hold ownership rights in a company, gaining profits and bearing losses from its operation.

Investors

Investors are individuals or entities that allocate capital with the expectation of receiving a financial return, often through the purchase of stocks, bonds, or real estate.

Trade-off

The concept of sacrificing one good or service to purchase or produce another.

Business Risk

The potential for financial loss or failure inherent in the operation of a business, influenced by market, industry, and internal factors.