[Anonymous]

Ques:
The following financial resources were among those received by Seco City during Year 1:
For acquisition of major capital facilities
$ 6,000,000
To create a non-expendable trust (e.g. an inmate/jail commissary)
2,000,000
With respect to the foregoing resources, what amount should be recorded in special revenue funds?
a. $0
b. $6,000,000
c. $2,000,000
d. $8,000,000
Explanation
Choice “a” is correct. With respect to the foregoing resources, the amount recorded in the special revenue funds should be $0.
The $6,000,000 for acquisition of major capital facilities should be recorded to the capital projects fund.
The $2,000,000 to create a non-expendable trust should be recorded in the private purpose trust fund.

Problem: The explanation above says that the 2,000,000 should be recorded in a private purpose trust fund. However, isn’t a private purpose trust fund expendable? If this amount is non-expendable shouldnt it be recorded in a Permanent fund instead?

[monikernc]

Private purpose trust funds can be either expendable or non-expendable depending on the stipulations

AUD - 93
BEC - 82
FAR - 76
REG - 88

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Ninja book and MCQs and the forum, all first try! 2016
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FAR 7/25/15 76!
AUD 10/30/15 93
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[Author]

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