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

Question

Quizplus · Accepted Answer

The $300,000 earnings from the principal, which is meant to be kept intact, should be transferred to a special revenue fund because these funds are used to account for proceeds of specific revenue sources that are legally restricted to expenditure for specific purposes, such as the operations of city parks in this case.

Several Years Ago, a Donor Gave $5 Million to Denton