Question

Which of the following is incorrect with respect to the determination of the appropriate fund in which to report the trust activities? C ) If the trust is to benefit the government or its citizenry and the principal may be expended, the appropriate trust would be a special revenue fund. C ) If the trust benefits private organizations or other governments and the principal must be maintained, the appropriate fund would be a custodial fund. C ) If the trust is to benefit the goverment or its citizenry and the principal must be maintained, the appropriate trust is a permanent fund. ( ) if the trust is to benefit Individuals, the appropriate trust would be a private-purpose trust fund.

Answer 1

Of all statements

Custodial fund defined is incorrect whereas correct definition for Custodial fund is

A custodial fund is fund that benefits beneficiary and no other person

So answer is b)

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