i have a discussion in government accounting can u help

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Dissuasion Board Question

Question

A New employee of the city of Kashime was working with the accounting records of several of its funds. This employee, John Fergie, found that a gift had been given to the city for the library. The gift mandated that only the earnings from the gift could be used for library operations. John wanted to setup a Permanent Fund for the principal of the donation to the library and use a Special Revenue Fund to account for the earnings of the investment and their use. Another employee argued that a Private Purpose Trust Fund should be used for both, principal and income.

Required:

  • Do you agree with either of these individuals? or
  • Do you have a better suggestion?

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