Question

Trust funds often exist over a longer period of time than agency funds, represent and develop vested interests of a beneficiary to a greater extent, and involve more complex administration and financial accounting and reporting.

True
False

Answer 1

False. Trust funds and agency funds have different characteristics and purposes. Trust funds involve complex administration and accounting due to their long-term investment strategies, while agency funds are typically established for specific purposes.

Step-by-step explanation:

False. Trust funds and agency funds have different characteristics and purposes. Trust funds are created to hold and manage assets for the benefit of specific beneficiaries over an extended period of time. They involve complex administration and accounting due to the nature of their long-term investment strategies and the need to ensure compliance with legal requirements.

On the other hand, agency funds are typically established by government entities to hold and manage funds for specific purposes or programs. They may have shorter durations and less complex administration and accounting compared to trust funds.