Which of the following statements about trust funds is NOT true?

A trust fund's treatment in financial statements can vary based on the ownership and purpose of the fund. Typically, trust funds established for specific purposes, such as malpractice claims, are indeed reflected in the financial statements of a healthcare organization. These funds are important for maintaining sufficient resources to cover potential liabilities, such as claims. Therefore, it would be inaccurate to state that a trust fund is not included in the financial statements, as doing so neglects the accountability and transparency required in financial reporting.

In the context of the other statements, a portion of the trust fund that is earmarked for potential payments related to malpractice claims would be treated as current assets because it is expected to be liquidated to pay those claims in the near term. This aligns with the principles of accounting that necessitate the classification of assets based on their liquidity and use.

Moreover, the accrual of estimated losses arising from claims is standard practice in financial accounting, ensuring that organizations set aside sufficient reserves for expected liabilities. Finally, the process of estimating losses is indeed driven by expected payouts from the trust fund, which underscores its role in managing financial risk associated with unanticipated claims.