A is corrent. Agency Funds are used to account for assets held by a governmental unit as an agent for individuals, private organizations, other governmental units, or other funds. In this case, Eldorado County would hold taxes for a school district in an Agency Fund.
B is incorrect. Trust Funds are used to account for assets under the administrative control of the government. Typical Trust Fund assets are generated from grants, awards, endowments, or gifts.
C is incorrect. Internal Service Funds are used to account for goods or services provided by one department of a governmental unit to other departments of a governmental unit.
D is incorrect. Special Revenue Funds are used to account for proceeds that are restricted to expenditures for specified purposes, but these funds do not hold resources for another governmental unit.
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