Question

Revenues that are legally restricted for expenditure on specified operating purposes should be accounted for in special revenue funds, including Multiple Choice Pension trust fund revenues. Gasoline taxes to finance road repairs. Endowment where the investment earnings are to be used for public purposes. Accumulation of resources for payment of general long-term debt principal and interest.

Answer 1

Answer:

Revenues that are legally restricted for expenditure on specified operating purposes should be accounted for in special revenue funds including

• Pension trust fund revenues
• Endowment where the investment earnings are to be used for public purposes.
• Accumulation of resources for payment of general long-term debt principal and interest.

Explanation:

There are two main reasons for restricting funds legally. It is either for use to accomplish a specific program or to be appropriated at a time in the future.

Pensions are designated to be paid out to the recipients in the future. To achieve these, a certain percentage of their earnings is legally restricted and accounted for in Pension Trust Fund revenues.

Endowment  funds is predominant in NGOs where the investment earnings are to be used for public purposes.

Relevant financial institutions can work mutually with a company to accumulate resources for payment of general long-term debt principal and interest.