question archive When should an agency fund be used to account for special assessments? In regards to governmental accounting
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When should an agency fund be used to account for special assessments? In regards to governmental accounting.
An agency fund be used to account for special assessments when the government is not obligated to pay the debt.
Step-by-step explanation
The agency fund is an account that contains funds the government has held on behalf of the taxpayers for their benefit. The agency funds can be used when the property owners are obligated to repay the interest and principle on the special assessment debt. The government only acts as an agent for the property owners or the bondholders. Therefore, the government does not report the assets, revenues, and obligation from the special assessments as its own.