What basis of accounting is used to account for transactions of a government's private-purpose trust fund?
A) Full accrual basis of accounting.
B) Modified accrual basis of accounting.
C) Cash basis of accounting.
D) Budgetary basis of accounting.

Question

Quizplus · Accepted Answer

Private-purpose trust funds use the full accrual basis of accounting, which recognizes revenues when they are earned and expenses when they are incurred, regardless of the timing of related cash flows. This approach provides a more accurate picture of the fund's financial position and activities.

What Basis of Accounting Is Used to Account for Transactions