Chapter 10- Question and review:
1) The distinction between expendable and non-expendable trust funds has been eliminated. Instead, some expendable trust funds have been reclassified and are now reported as special revenue funds while others have been replaced by the "private-purpose" trust fund. This newly created fund type is used to report all trust arrangements under which principal and income are to be used to benefit individuals, private organizations or other governments. Non-expendable or endowment-like arrangements available to support the operations or programs of the government are accounted for in a governmental fund type, newly created by GASB statement 34, called "permanent funds."
5) Permanent funds are governmental funds and they are reported in government-wide funds. Income from permanent funds should be assigned to specific functions if the income is restricted to those programs. Otherwise they will be reported as investment income. Fiduciary funds shouldn’t not in the government-wide statements.
15) Agency funds are the other main category of fiduciary funds. Associated mainly with governments, they are used to account for resources held by one entity in a capacity as a trustee or an agent of another. Agency funds are the simplest of all funds to account for. There are no fund balances and therefore no changes in fund balances upon which to report. Budgets are unnecessary. Because agency funds are custodial in nature, they do not carry out operations that affect the governments that administer them. Nevertheless, governments should prepare agency fund balance sheets and statements that show the changes in assets and liabilities. The assets and liabilities should be measured on the modified accrual basis....