Exam 7: Fiduciary Funds, Interfund Transactions

Which of the following is true regarding fiduciary funds?

Agency funds report the excess of assets over liabilities as "Net Position".

An endowment that is for the benefit of individuals and not the government controlling the funds should be accounted for using a private-purpose trust fund.

Property that reverts to government ownership upon the death of the owner because of a lack of identifiable heirs is termed Escheat Property.

Which fund is used when a contributor specifies that the income of trust assets be used for the benefit of the general citizenry?

A fund that exists when a government is the trustee for a defined benefit pension plan, or a defined contribution pension plan is an:

Escheat property, often collected by the state, is to be reported in the fund to which the property ultimately reverts.

Employers with defined contribution plans will report a pension liability if the required contribution has not been fully paid by year end.

The required financial statements for agency funds include a Statement of Fiduciary Net Position, and a Statement of Changes in Fiduciary Net Position.

The City of DeKalb contributes to three pension plans: 1) a statewide pension plan for nonuniformed personnel, 2) a locally administered plan for police officers, and 3) a locally administered plan for firefighters. The City is trustee for the plans for police officers and firefighters. Which of the following is true?

Unless use of an agency fund is mandated by law, by GASB standards, or by decision of the governing board of a government, an agency relationship may be accounted for within governmental and/or proprietary funds.

When accounting for defined benefit pensions, the net pension liabilities for police and fire department employees governmental activitiesare:

Fiduciary funds are used to account for assets held by a government acting as a trustee or agent for entities external to the governmental unit, including individuals, organizations, and other governmental units. For this reason, fiduciary funds are often identified in governmental financial reports as Trust and Agency Funds.

Which of the following is true regarding accounting for investments by state and local governmental units?

What is the appropriate accounting treatment for real estate investments held in endowments GASB Statement 52?

What are the four types of fiduciary funds and the function of each?

On July 1, 2016, the City of Corfu received a gift of debt securities of XYZ Company with a nominal par) value of $1,600,000. Income is to be used to make awards for civic achievements. As of the date of the gift, the securities had a market value of $1,668,000. Included in this amount is accrued interest of $18,000. The bonds carried an annual interest rate of 5%, payable semiannually on April 1 and October 1. During the fiscal year ended June 30, 2017, the following transactions took place: 1. The gift was received. 2. On October $1 , \$ 40,000$ in interest was received 3. On April $1 , \$ 40,000$ in interest was received. 4. On April 1 , irrunediately after the receipt of irterest, the XYZ bonds were sold for $\$ 1,662,000$ . The proceeds were irvested in $\mathrm { ABC }$ bonds, which pay interest serniarrually on April 1 and October 1 . The bonds were purchased at par value. 5. On Jure 30, 2017, acened interest of $\$ 20,775$ on the ABC bonds was recogrized 6. On June 30,2017 , awards were made in the arnount of $\$ 75,000$ . 7. As of Jure 30,2017 , the fair value of the fair value of the $A B C$ bonds was $\$ 1,664,000$ , exclusive of accrued interest. Required: A. Record the above transactions on the books of the City of Corfu Private-Purpose Trust Fund. B. Prepare a Statement of Changes in Fiduciary Net Position for the City of Corfu Private-Purpose Trust Fund for the year ended June 30, 2017.

Investment pools invested from external parties are recorded in Investment Trust Funds.

For governmental-type funds, Statement 53 reporting of derivatives applies only to reporting at the government-wide level, not the fund-basis statements.

James McHughes gave the following to the City of Carnesville in order to establish a private-purpose trust: O Land - cost, $400,000; fair market value as of the date of the gift, $500,000. O Securities - cost, $1,600,000; fair market value as of the date of the gift, $1,800,000. The amount to be recorded as additions for gifts by the private-purpose trust fund would be: