What are permanent funds designed to account for?

Permanent funds are specifically designed to account for resources that are restricted in their use, meaning that they can only be used for a specific purpose as determined by the terms of the trust or other agreements. These funds are established to maintain capital, with the principal generally remaining intact, while the earnings generated from these resources can typically be used for certain specified purposes, such as funding public services or projects.

In contrast, other types of funds mentioned in the options serve different functions. For example, capital project funds are intended for financing construction or major renovation projects, while debt repayment resources are related to managing and repaying borrowed funds. Proceeds from special revenue sources are earmarked for specific programs or activities but do not carry the same restriction concerning the principal that permanent funds do. Therefore, recognizing that permanent funds hold a unique role in the management of governmental resources tied to trust agreements with restrictions underscores their function effectively.