In fund accounting, ___ fund can not be used for other purposes. (a) recurring (b) non-recurring (c) restricted (d) encumbering
Answers
encumbering is the correct answer
Answer: Option A. In fund accounting, recurring fund can not be used for other purposes. A fund accounting is an accounting method which helps in recording various resources which are of limited use by any individual donor, governing agency, or any other individuals or business organisations or by any law. It further emphasizes business accountability rather than business profitability, and is used by a non-profit entities and by the government.
Explanation:
1. Fund accounting means maintaining the financial books and business records of any investment portfolio.
2. It helps to perform capital or entity calls and large distributions to investors.
3. It provides reporting to the top management at the time of disposition and the performance of the investment fund assets.