Question

Revenues that are legally restricted to be expended for specified operating purposes should be accounted for in special revenue funds, including

a. Endowment where the investment earnings are to be used for public purposes.
b. Pension trust fund revenues
c. Accumulation of resources for payment of general long-term debt principal and interest.
d. Gasoline taxes to finance road repairs.

Answer 1

Revenues that are legally restricted to be expended for specified operating purposes should be accounted for in special revenue funds. Examples include endowment revenues and gasoline taxes for road repairs.

Step-by-step explanation:

Revenues that are legally restricted to be expended for specified operating purposes should be accounted for in special revenue funds. These funds are separate from the general fund and are used to track and manage revenue sources that have specific restrictions on their use.

Examples of such revenues include:

1. Endowment revenues, where the investment earnings are to be used for public purposes.
2. Gasoline taxes specifically collected to finance road repairs.

Revenue sources like pension trust fund revenues and the accumulation of resources for the payment of general long-term debt principal and interest are not legally restricted to be expended for specified operating purposes, so they should not be accounted for in special revenue funds.