Response to the following questions:
1. Residents of a neighborhood financed the installation of sidewalks through a note payable. The note was to be repaid through a special assessment tax on their properties. When is it appropriate to account for special assessment activities in an agency fund? In which fund should the special assessment tax receipts be reported if they do not meet the criteria for an agency fund?
2. A concerned citizen provides resources and establishes a trust with the local government. What factors should be considered in determining which fund to report the trust activities?