Revenues that are legally restricted to be expended for specified operating purposes should be accounted for in special revenue funds,including
A) Endowment where the investment earnings are to be used for public purposes.
B) Pension trust fund revenues.
C) Accumulation of resources for payment of general long-term debt principal and interest.
D) Gasoline taxes to finance road repairs.

Question

Quizplus · Accepted Answer

Gasoline taxes that are legally restricted to funding road repairs should be accounted for in a special revenue fund. This is because the revenue is restricted and can only be used for a specific operating purpose. The other options listed do not necessarily need to be accounted for in special revenue funds. Endowment earnings may be accounted for in an endowment fund, pension trust fund revenues may be accounted for in a pension trust fund, and resources for payment of long-term debt may be accounted for in a debt service fund. However, none of these options are legally restricted to specific operating purposes like gasoline taxes for road repairs are.

Revenues That Are Legally Restricted to Be Expended for Specified