Final answer:
True, special assessments for construction projects that are not the government's primary responsibility can be reported in an Agency Fund. Agency Funds are for when the government is an agent, not owning the funds, akin to parts of the government owing money to each other.
Step-by-step explanation:
The statement is true. Special assessments for a construction project, where the reporting government is not the primary entity responsible for the debt, can be reported in an Agency Fund. True, special assessments for construction projects that are not the government's primary responsibility can be reported in an Agency Fund.
Agency Funds are for when the government is an agent, not owning the funds, akin to parts of the government owing money to each other. Specifically, this means that the government is acting as an agent for the parties involved in the transaction rather than being the party that stands to benefit or lose from the debt arrangement.
Agency Funds are used to account for situations where the government is the custodian of funds but does not have ownership of those funds. This is akin to situations in finance where one part of the government holds the debt of another, effectively owing each other money, but for reporting purposes, those debts are accounted for separately.