Final answer:
Fiduciary funds report only transactions with external parties and act as a trustee or agent for someone else, not typically involving internal party transactions.
Step-by-step explanation:
The question is whether all fiduciary funds report transactions between the fund and both internal and external parties. The answer is B. False. Fiduciary funds are used to account for resources held for the benefit of parties outside the governmental entity. The key characteristic of fiduciary funds is that the government is acting as a trustee or agent for someone else, such as employees for pension funds, other governments, private organizations, or individuals. Therefore, fiduciary funds typically report only transactions with external parties, since they are designed to benefit those external to the governmental entity. Transactions with internal parties, if they occur, are not the main focus of these types of funds and are generally accounted for in other funds such as general funds or proprietary funds.