Oregon Construction Contractors (CCB) Practice Test 2026 – All-in-One Resource for Exam Success!

Withheld taxes are categorized as "trust" funds because they involve money that an employer withholds from an employee's paycheck for tax obligations, which are ultimately owed to the government. This withheld amount does not belong to the business; instead, it is collected on behalf of the employees to ensure their taxes are paid. The business acts as a custodian of these funds, holding them in trust until they are remitted to the appropriate tax authority.

In the context of business finances, understanding the classification of withheld taxes as trust funds is crucial. It highlights the responsibility of the business to manage these funds carefully and adhere to legal obligations regarding timely remittance. This is different from liabilities, which are debts or obligations of the business itself, and operating funds, which are directly associated with the day-to-day expenses of running the business. The concept of "estate" funds refers to assets belonging to a deceased person's estate, which is not relevant in this context.