When a city received a private donation of $1,000,000 stipulating that the principal donation would be preserved but allowing the interest income to be spent on building a city park with access for disabled children, which fund should the money be recorded in?
A) The general fund.
B) A private purpose trust fund.
C) A permanent fund.
D) An agency fund.
E) A special revenue fund.

Question

Quizplus · Accepted Answer

The money should be recorded in a permanent fund because the principal donation must be preserved and only the interest income can be spent on the specified purpose. This aligns with the characteristics of a permanent fund, which is intended to be a permanent source of funding for a specified purpose.

When a City Received a Private Donation of $1,000,000 Stipulating