What is a characteristic of special revenue funds?

The correct answer highlights a key function of special revenue funds within governmental accounting. Special revenue funds are specifically designed to account for resources that are restricted or committed to particular purposes by law or other regulations. This means that the financial resources collected and reported in these funds must be used for specific expenditures, aligning with the intent of the legislation or regulation that created the fund.

When government entities collect revenues from sources such as taxes, grants, or fees that are specifically earmarked for a designated purpose, those revenues are recorded in special revenue funds. This characteristic ensures transparency and accountability in how funds are allocated and spent, as it allows the government to track those resources and their respective expenditures clearly.

In contrast, the other options do not reflect the fundamental purpose of special revenue funds. For instance, unrestricted government grants would typically be recorded in the general fund rather than a special revenue fund, as the latter is designated for specific uses. Similarly, the exclusive use for debt servicing is characteristic of debt service funds, not special revenue funds. Lastly, long-term capital asset expenditures are usually reflected in capital projects funds rather than special revenue funds, which focus on the management of resources for specific purposes rather than long-term investments.