Federal agencies that are required to report a Statement of Custodial Activity have transactions that are similar to which fund type of a state or local government?

Question

Quizplus · Accepted Answer

Federal agencies that are required to report a Statement of Custodial Activity have transactions that are similar to agency funds of state or local governments. Agency funds are used to account for assets held by the government in a custodial capacity. Similarly, federal agencies hold assets in a custodial capacity for individuals, organizations or other governments. Therefore, A is the best choice.

B, C, and D are not relevant as they do not align with the nature of the custodial accounts held by federal agencies. Internal service funds account for goods and services provided by one department or agency to others within the same government entity, capital projects funds are used to account for the costs of acquiring or constructing major capital facilities or assets, and permanent funds are used to record resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the government's programs.

Federal Agencies That Are Required to Report a Statement of Custodial