Several years ago, a donor gave $5 million to the City and specified that the principal was to be kept intact but the earnings were to be used to support operations of the city parks.During the current year, the City earned $300,000 on the gift.To what type of fund should the City transfer accountability for the $300,000 earnings.

Question

Quizplus · Accepted Answer

The earnings from the gift are designated for a specific purpose, which is to support operations of the city parks. Therefore, the City should transfer accountability for the $300,000 earnings to a special revenue fund designated for park operations. This will ensure that the earnings are used for their intended purpose and prevent them from being commingled with other funds.

Several Years Ago, a Donor Gave $5 Million to the City