Which of the following is true regarding Agency Funds?

Agency funds are used by governments to report assets held in a custodial capacity for individuals, organizations, or other governments. The primary purpose of agency funds is to account for resources that the government holds but does not have an ownership interest in. Among the options provided, the statement that they are primarily for tax collection is accurate because agency funds often serve as conduits for collecting and distributing tax revenues, such as property taxes that are collected on behalf of other entities.

They do not report revenues in financial statements, as the resources in an agency fund are liabilities owed to the individuals or entities for whom the government acts, rather than revenue. Additionally, agency funds are included in financial statements, specifically in the fiduciary fund statements, to reflect the government's role in managing these financial resources. While they may relate to employee pension payments in some contexts, that's not their primary function. Therefore, the accurate statement highlights their key role in tax collection functions.