When a government receives a gift that must be invested permanently and the investment proceeds are used to benefit the government or its citizens, it would be appropriate to account for that gift in a private purpose trust fund.

Question

Quizplus · Accepted Answer

Trusts that generate income for the benefit of the government or its citizens and require the principal to be maintained are reported in permanent funds. Trusts that generate income for the benefit of individuals, private organizations or other governments are reported in private-purpose trust funds.

When a Government Receives a Gift That Must Be Invested