Question

The City of Matthews has been given a $1,000,000 gift that is restricted by the donor, Rebecca Smith. Ms. Smith’s gift agreement mandates that only the earnings from the gift may be used to maintain or improve athletic facilities owned by the city. Which fund should be used to account for the gift?

Answer 1

It is called A PERMANENT FUND.

Explanation: A PERMANENT FUND is a type of governmental fund that is used to record and account for endowments such as gifts for government or non governmental organisations.

This fund often times is used in financing civic projects, facilities owned by the city concerned and the likes.