Final answer:
In modified accrual accounting, revenues are recognized when available and measurable, and expenses when incurred. Permanent funds, a type of governmental fund, use modified accrual accounting. Thus, the correct answer is c. Permanent funds.
Step-by-step explanation:
The question asks which of the following would use modified accrual accounting: a. Private-purpose trust funds, b. Agency funds, c. Permanent funds, d. None of the above.
Modified accrual accounting is typically used by governmental entities, particularly for governmental funds. This accounting method recognizes revenues when they become available and measurable, and expenses when the liability is incurred. In the context of the options provided, permanent funds are a type of governmental fund, which utilize modified accrual accounting. Private-purpose trust funds and agency funds typically use full accrual accounting.
Therefore, the correct answer is: c. Permanent funds.