What is considered a characteristic of special revenue funds?

Special revenue funds are specifically designed to account for resources that are legally restricted or committed for specific purposes other than debt service or capital projects. This characteristic allows these funds to differentiate themselves from general funds, which are used for unrestricted general expenditures. For example, a special revenue fund might be created to handle taxes collected for a specific program, such as education or environmental protection, ensuring that the resources are allocated exclusively for that purpose.

By focusing on money that is dedicated to a single purpose, special revenue funds help organizations maintain compliance with legal and regulatory requirements while also facilitating transparency in how public resources are utilized. This targeted approach not only aids in accurate reporting but also in tracking the effectiveness of the funded programs.