Question 1

Unless otherwise prohibited custodial relationships can be reported in the General Fund rather than a custodial fund.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following activities would most appropriately be recorded by a custodial fund?

Accepted Answer

A)  Donations collected for improvements to the public library. 
B)  Deposits held for customers of a municipal-owned electric utility. 
C)  Taxes collected by a county government on behalf of cities within the county. 
D)  Assets held for college scholarships to be awarded to the children of police officers. 
A)  Donations collected for improvements to the public library. 
B)  Deposits held for customers of a municipal-owned electric utility. 
C)  Taxes collected by a county government on behalf of cities within the county. 
D)  Assets held for college scholarships to be awarded to the children of police officers.

Question 3

In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement.

Accepted Answer

A) True 
 B)False

Question 4

A government employer who makes contributions to pension plans for all employees:

Accepted Answer

A)  Reports pension expenditures in a governmental fund in the amount actually contributed. 
B)  Reports pension expenses in a proprietary fund reflecting changes to the net pension liability. 
C)  Recognizes pension costs in the government-wide statements on the accrual basis of accounting. 
D)  All of these are correct. 
A)  Reports pension expenditures in a governmental fund in the amount actually contributed. 
B)  Reports pension expenses in a proprietary fund reflecting changes to the net pension liability. 
C)  Recognizes pension costs in the government-wide statements on the accrual basis of accounting. 
D)  All of these are correct.

Question 5

A defined benefit plan specifies the amount or rate of contribution that the employer and employees must contribute to the members' accounts in the pension plan.

Accepted Answer

A) True 
 B)False

Question 6

GASB standards provide comprehensive guidance on pension accounting and financial reporting for defined benefit pension plan employers, but the FASB provides guidance for plan sponsors.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following financial statements is prepared by fiduciary funds?

Accepted Answer

A)  Statement of fiduciary net position. 
B)  Statement of fiduciary activities. 
C)  Statement of fiduciary cash flows. 
D)  All of these answers are correct. 
A)  Statement of fiduciary net position. 
B)  Statement of fiduciary activities. 
C)  Statement of fiduciary cash flows. 
D)  All of these answers are correct.

Question 8

An Olympic medalist swimmer who grew up in the city contributed $750,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the swimming complex. The $750,000 would most appropriately be recorded in a(an):

Accepted Answer

A)  Custodial fund. 
B)  Permanent fund. 
C)  Private-purpose trust fund. 
D)  Investment trust fund. 
A)  Custodial fund. 
B)  Permanent fund. 
C)  Private-purpose trust fund. 
D)  Investment trust fund.

Question 9

Other postemployment benefits (OPEB) include benefits other than pensions, such as health care, life insurance, and long-term care.

Accepted Answer

A) True 
 B)False

Question 10

Describe the types of pension plans most often found in governments and the differences between them.

Accepted Answer

Pension plans are of two general types,

Question 11

Investment trust funds and pension trust funds should be accounted for in the same manner as permanent funds.

Accepted Answer

A) True 
 B)False

Question 12

On January 1, Forrester County is holding investments for Tinsel Town valued at $500,000 in an investment pool, accounted for in an investment trust fund. On January 1, Valley School District invests $1,500,000 in the pool. Earnings on pooled investments for the six months ended June 30 totaling $300,000 were received in cash.
1) What percentage interest in the pool is held by the town and the school district?
2) (a) Show the entry in the Investment Trust Fund to record the School District's investment in the pool. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(b) Show the entry in the Investment Trust Fund to summarize the collection of interest for the six-month period. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(c) Show the entry in the Investment Trust Fund to record the distribution of the interest earned on pooled investments, assuming that the interest will be reinvested by the town and school district. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Accepted Answer

1) The town's interest in the

Question 13

The GASB provides three criteria for determining if a fiduciary relationship exists. Which of the following four is not one of the three criterion listed by the GASB?

Accepted Answer

A)  The assets are controlled by the government. 
B)  The government is not to be involved in administrative decision-making concerning the fund assets. 
C)  The assets related to the activity of the fund were not generated by the government's exchange or nonexchange revenues. 
D)  The government does not receive any benefit from the assets in the fund. 
A)  The assets are controlled by the government. 
B)  The government is not to be involved in administrative decision-making concerning the fund assets. 
C)  The assets related to the activity of the fund were not generated by the government's exchange or nonexchange revenues. 
D)  The government does not receive any benefit from the assets in the fund.

Question 14

Which of the following activities would be recorded by a trust fund?

Accepted Answer

A)  Deposits held for customers of a city-owned electric utility. 
B)  Assets passed-through the state government to the local government. 
C)  Assets held for special assessment bondholders for which the city has no liability. 
D)  Assets that are used to assist in the preservation of a private residence. 
A)  Deposits held for customers of a city-owned electric utility. 
B)  Assets passed-through the state government to the local government. 
C)  Assets held for special assessment bondholders for which the city has no liability. 
D)  Assets that are used to assist in the preservation of a private residence.

Question 15

When an investment pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of the transfer.

Accepted Answer

A) True 
 B)False

Question 16

A local civic group gave the county government $25,000 cash to be used to pay the utility bills of persons with income below the poverty level. The city should account for the $25,000 contribution in:

Accepted Answer

A)  An investment trust fund. 
B)  The General Fund. 
C)  A permanent fund. 
D)  Private-purpose trust fund. 
A)  An investment trust fund. 
B)  The General Fund. 
C)  A permanent fund. 
D)  Private-purpose trust fund.

Question 17

According to the GASB, control of an asset means the government must have the asset in its possession.

Accepted Answer

A) True 
 B)False

Question 18

In pension accounting, the employer's net pension liability:

Accepted Answer

A)  Is measured as the total pension liability less the amount of fiduciary net position held for future pension payments. 
B)  Represents the portion of the present value of projected benefit payments to be provided through the pension plan to current active and inactive employees that is attributed to those employees' past periods of service. 
C)  Is the same as the net pension obligation. 
D)  Is based on actuarial valuations generally required to be performed at least every five years. 
A)  Is measured as the total pension liability less the amount of fiduciary net position held for future pension payments. 
B)  Represents the portion of the present value of projected benefit payments to be provided through the pension plan to current active and inactive employees that is attributed to those employees' past periods of service. 
C)  Is the same as the net pension obligation. 
D)  Is based on actuarial valuations generally required to be performed at least every five years.

Question 19

The GASB requires disclosures related to three types of credit risk.

Accepted Answer

A) True 
 B)False

Question 20

Most investment trust funds distribute investment earnings and changes in investment values on a daily basis.

Accepted Answer

A) True 
 B)False

Unless otherwise prohibited custodial relationships can be reported in the General Fund rather than a custodial fund.

Which of the following activities would most appropriately be recorded by a custodial fund?

In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement.

A government employer who makes contributions to pension plans for all employees:

A defined benefit plan specifies the amount or rate of contribution that the employer and employees must contribute to the members' accounts in the pension plan.

GASB standards provide comprehensive guidance on pension accounting and financial reporting for defined benefit pension plan employers, but the FASB provides guidance for plan sponsors.

Which of the following financial statements is prepared by fiduciary funds?

An Olympic medalist swimmer who grew up in the city contributed $750,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the swimming complex. The $750,000 would most appropriately be recorded in a(an):

Other postemployment benefits (OPEB) include benefits other than pensions, such as health care, life insurance, and long-term care.

Describe the types of pension plans most often found in governments and the differences between them.

Investment trust funds and pension trust funds should be accounted for in the same manner as permanent funds.

The GASB provides three criteria for determining if a fiduciary relationship exists. Which of the following four is not one of the three criterion listed by the GASB?

Which of the following activities would be recorded by a trust fund?

When an investment pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of the transfer.

A local civic group gave the county government $25,000 cash to be used to pay the utility bills of persons with income below the poverty level. The city should account for the $25,000 contribution in:

According to the GASB, control of an asset means the government must have the asset in its possession.

In pension accounting, the employer's net pension liability:

The GASB requires disclosures related to three types of credit risk.

Most investment trust funds distribute investment earnings and changes in investment values on a daily basis.

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters

Exam 8: Accounting for Fiduciary Activities—Custodial and Trust Funds

Unless otherwise prohibited custodial relationships can be reported in the General Fund rather than a custodial fund.

Which of the following activities would most appropriately be recorded by a custodial fund?

In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement.

A government employer who makes contributions to pension plans for all employees:

A defined benefit plan specifies the amount or rate of contribution that the employer and employees must contribute to the members' accounts in the pension plan.

GASB standards provide comprehensive guidance on pension accounting and financial reporting for defined benefit pension plan employers, but the FASB provides guidance for plan sponsors.

Which of the following financial statements is prepared by fiduciary funds?

An Olympic medalist swimmer who grew up in the city contributed $750,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the swimming complex. The $750,000 would most appropriately be recorded in a(an):

Other postemployment benefits (OPEB) include benefits other than pensions, such as health care, life insurance, and long-term care.

Describe the types of pension plans most often found in governments and the differences between them.

Investment trust funds and pension trust funds should be accounted for in the same manner as permanent funds.

The GASB provides three criteria for determining if a fiduciary relationship exists. Which of the following four is not one of the three criterion listed by the GASB?

Which of the following activities would be recorded by a trust fund?

When an investment pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of the transfer.

A local civic group gave the county government $25,000 cash to be used to pay the utility bills of persons with income below the poverty level. The city should account for the $25,000 contribution in:

According to the GASB, control of an asset means the government must have the asset in its possession.

In pension accounting, the employer's net pension liability:

The GASB requires disclosures related to three types of credit risk.

Most investment trust funds distribute investment earnings and changes in investment values on a daily basis.

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters