Question

Which of the following is FALSE regarding permanent funds? A. Permanent funds are considered governmental funds B. Permanent funds are appropriate when a gift must be invested and the proceeds used to benefit individuals or organizations C. Permanent funds use the current financial resources measurement focus and modified accrual basis of accounting D. Major permanent funds would be reported in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances E. Alaska is one state with a permanent fund

Answer 1

B. Permanent funds are appropriate when a gift must be invested and the proceeds used to benefit individuals or organizations.

Step-by-step explanation:

Permanent funds are a type of fund that is considered a restricted true endowment fund for governments and non-profit organizations. These are required for special purpose government entities that engage in business. These funds are used to generate and disburse money to people entitled to payments due to a particular agreement. However, permanent funds are not appropriate when a gift must be invested and the proceeds used to benefit individuals or organizations.