Final answer:
Fiduciary funds are special-purpose funds used to benefit others. They include investment trust funds and private-purpose trust funds.
Step-by-step explanation:
Fiduciary funds are special-purpose funds that account for resources held by a government entity in a trustee capacity. These funds are used to benefit others and are classified into two types: investment trust funds and private-purpose trust funds.
Investment trust funds are used when a government acts as a trustee for an investment pool. These funds account for the internal portion of the pool and may include assets held for external participants and the government itself. For example, if a government manages an investment pool for multiple beneficiaries, such as other governments or public entities, it would use investment trust funds to track the assets.
Private-purpose trust funds are used when a government administers resources for the benefit of others. These funds are typically held to distribute resources to specific beneficiaries, such as local not-for-profit charities or scholarship programs. The government acts as the trustee and manages the funds on behalf of the beneficiaries.
Therefore, the correct answer is option C) Both of the above.