Which of the following funds of a government uses the same basis of accounting as a proprietary fund?

• A. Investment trust fund
• B. General fund
• C. Capital projects fund
• D. Debt service fund

Answer: (A)

In GASB, the basis of accounting varies by fund type: proprietary and fiduciary funds use accrual accounting, while governmental funds use modified accrual and focus on current financial resources. Investment trust funds are a type of fiduciary fund that holds external investments for others and is accounted for on the accrual basis, just like proprietary funds. This means they recognize long-term assets and liabilities, record investments at fair value, and report revenues (like interest and dividends) when earned, along with gains and losses in net position. The other options—general fund, capital projects fund, and debt service fund—are governmental funds and use modified accrual, focusing on current resources rather than full economic resources. Therefore, the investment trust fund aligns with the same accrual basis as a proprietary fund.