Question

In a particular year, the Haynes Independent School District collects $100 million in property taxes.State law requires that property-rich school districts appropriate and contribute 2 percent of all property taxes that they collect to a state pool,which will be divided among property-poor districts.Upon receipt of the taxes,the Haynes district,which the state considers a property-rich district,should account for____________________________________________.
a.$100 million in an agency fund
b.$98 million in a governmental fund and $2 million in an agency fund
c.$100 million in a governmental fund
d.$98 million in a governmental fund and $2 million in a fiduciary fund other than an agency fund

Answer 1

Answer:

c.$100 million in a governmental fund

Explanation:

We are recording for the collectiong of the funds thus, we should ignore the latter contribution unti lit is performed.

An agency fund occures when one government agency colllects and holds on behalf of another

In this case, the Haynes Independent School District do not collected those taxes in behalft of a certain governemtn agency. Latter the State will take a portion of this and assign as it see fits thus, it will not be considered agency fund. Hence, the entire amount is governmental fund