Question

A permanent fund classified under governmental funds ... A. Accounts for most of the basic services provided by the governmental unit. B. Accounts for financial resources intended for major capital projects C. Accounts for services provided by one department of a government to another D. Accounts for resources that are legally restricted so only earnings, not principal, may be expended.

Answer 1

Answer:

D. Accounts for resources that are legally restricted so only earnings, not principal, may be expended.

Explanation:

Based on the scenario been described in the question, we can say that a permanent fund classified under governmental funds are accounts for resources that are legally restricted so only earnings, not principal, may be expended. We have government funds as special service funds and debt service funds. so we this explanation, we can see that the best is option D which is the correct answer.

Answer 2

Answer:D. Accounts for resources that are legally restricted so only earnings, not principal, may be expended.

Explanation: For permanent fund to be classified under governmental funds, the accounts for resources are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government and its citizenry.

It is specified that the purpose of the funds are to benefit the government and its citizens for it to be, the condition must be met.