Final answer:
The accurate statement regarding permanent funds is that the income they generate must benefit the government and/or its citizens. Permanent funds' principal is not expendable but the income is, and they typically use full accrual accounting rather than modified accrual accounting.
Step-by-step explanation:
The question pertains to permanent funds in the context of governmental financial management. Permanent funds are resources that are required to be used to benefit the government and/or its citizens, typically in the form of generating income that can be used for public purposes. However, the principal amount of the fund generally cannot be spent and must be preserved intact.
(c) 'The income from permanent funds must benefit the government and/or its citizens' is a true statement regarding permanent funds. On the other hand, (a) 'Permanent funds must use modified accrual accounting' is incorrect because permanent funds typically utilize full accrual accounting. Also, while (b) 'Permanent funds must include resources that cannot be expended' might be misleading – it is the principal of the permanent fund that cannot be expended, not the resources as a whole, since the income generated can, in fact, be spent.
Thus, the correct answer is (c) The income from permanent funds must benefit the government and/or its citizens.