A county manages individual investment accounts for local governments. Which type of fund does this represent?

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The scenario of a county managing individual investment accounts for local governments pertains specifically to an Investment Trust Fund. This type of fund is designed to account for the external portions of investment pools, where the investments are held for other governments or entities. It serves to manage funds on behalf of local governments, allowing them to invest collectively and share in the earnings.

Investment Trust Funds collect the investments and income from those investments and then distribute them according to the interests of the various local governments participating in the investment pool. This arrangement provides benefits like diversification and professional management, which are particularly advantageous for smaller local governments.

Other fund types mentioned do not align with this activity. For instance, Enterprise Funds typically deal with business-type activities that charge fees to users for goods or services, while General Funds cater to the general operations of a government, funding routine activities. Special Revenue Funds are earmarked for specific revenue sources that are designated for specific purposes within a government’s operation but do not encompass investment management for other entities. Therefore, the characterization of the county’s management of individual investment accounts as an Investment Trust Fund is fitting.

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