A governmental entity receives a gift of cash and investments with a fair value of $200,000.The donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested.The $200,000 gift should be accounted for in which of the following funds?

Question

Quizplus · Accepted Answer

The gift should be accounted for in a permanent fund since the principal must be kept intact and only the earnings may be used for the specified purpose of beautifying city-owned parks. The other funds listed (general fund, private-purpose trust fund, agency fund) do not meet the criteria for a permanent fund.

A Governmental Entity Receives a Gift of Cash and Investments