Which governmental fund includes resources that are legally restricted so that the governmental entity must maintain the principal and can use only the earnings from the fund's resources to benefit the government's programs for all of its citizens?
A)General fund
B)Special revenue fund
C)Capital projects fund
D)Permanent fund

Question

Quizplus · Accepted Answer

The Permanent Fund includes resources that are legally restricted, and the government can only use the earnings from the fund's resources to benefit programs for all its citizens. The principal must be maintained. This type of fund is typically used for long-term investments to benefit future generations. Option A is incorrect as the General Fund is the primary operating fund of the government, and resources are not legally restricted. Option B is incorrect as the Special Revenue Fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to spending for particular purposes. Option C is incorrect as the Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of capital facilities.

Which Governmental Fund Includes Resources That Are Legally Restricted So