What is the primary reason that governmental entities use fund accounting?
A) Fund accounting is required by law.
B) Fund accounting is required by GAAP.
C) Fund accounting promotes control and accountability over restricted resources.
D) Fund accounting promotes better control over operating activities.

Question

What is the primary reason that governmental entities use fund accounting? 
A) Fund accounting is required by law.
B) Fund accounting is required by GAAP.
C) Fund accounting promotes control and accountability over restricted resources.
D) Fund accounting promotes better control over operating activities.

Quizplus · Accepted Answer

Fund accounting is primarily used by governmental entities to ensure control and accountability over resources that are restricted or earmarked for specific purposes, allowing for more effective management and reporting of how those resources are used.

What Is the Primary Reason That Governmental Entities Use Fund