In accounting for permanent funds only the income can be spent; the principal must be preserved intact.

Question

Quizplus · Accepted Answer

Permanent funds are a type of fiduciary fund used by governments to account for resources that are legally restricted in a way that only earnings, and not principal, can be spent for purposes that support the reporting government's programs—this means the principal must be preserved intact.

In Accounting for Permanent Funds Only the Income Can Be