In the current year, Loma City earned $24,000 on the principal of a private-purpose trust fund but disbursed only $20,000.
-During the current year the private-purpose trust fund will recognize, related to the cash outflow:
A) $20,000 transfer-out.
B) $20,000 expenses.
C) $24,000 deduction from net position.
D) $20,000 deduction from net position.

Question

Quizplus · Accepted Answer

Private-purpose trust funds recognize deductions from net position when they incur expenses or distribute resources. The $20,000 cash outflow would be recorded as a deduction from net position.

In the Current Year, Loma City Earned $24,000 on the Principal