Which of the statements concerning agency funds is true?

Question

Quizplus · Accepted Answer

Agency funds are reported only on the statement of fiduciary net assets, and not on the statement of activities or balance sheet. Agency funds are used to account for assets held by a government as an agent for individuals or organizations outside the government. Examples of agency funds include taxes collected on behalf of another entity, such as sales tax or payroll tax, or funds held temporarily to be later distributed to beneficiaries such as court awards or trust funds. The accounting basis for agency funds is the same as for fiduciary funds, using the full accrual basis of accounting. Temporary accounts such as Additions and Deductions are not used for agency funds. Agency funds do receive cash, as they are used to hold and manage cash assets for other entities.

Which of the Statements Concerning Agency Funds Is True