Deck 7: Fiduciary Trustfunds

Question 1

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

Answer 1

False

Question 2

Fiduciary Funds are not included in the government-wide financial statements.

Answer 2

True

Question 3

Agency fund assets are offset by liabilities equal in amount,so no fund equity exists.

Answer 3

True

Question 4

If a city government contributes to a statewide pension plan,both the city and state governments would report the state administered plan as a pension trust fund in their basic financial statements.

Question 5

The required financial statements for agency funds includes only a Statement of Fiduciary Net Assets.

Question 6

Fiduciary fund financial statements include the Balance Sheet and the Statement of Changes in Fiduciary Net Assets.

Question 7

Agency funds report no revenues,expenses,or fund equity accounts.

Question 8

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.

Question 9

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.

Question 10

Fiduciary funds use the economic resource measurement focus.

Question 11

GASB Standards require that IRS 457 Deferred Compensation Plans,if administered by the governmental unit,be reported as pension trust funds.

Question 12

Agency fund assets belong to the party or parties for which the government acts as agent.

Question 13

Donated resources that benefit individuals or private organizations are reported in a private-purpose trust fund.

Question 14

If a government has a locally administered pension plan for which it is trustee,the government would report the locally administered plan as a pension trust fund in the basic financial statements.

Question 15

Fiduciary funds use the modified accrual basis of accounting.

Question 16

Fiduciary funds are reported in the fund-basis and government-wide financial statements.

Question 17

Assets held in trust that are restricted to benefit the citizenry in general or in support of he reporting government's programs would be reported as private purpose trust funds.

Question 18

If a government is liable for payment of special assessment debt in the event of default by the property owners,then an agency fund must be used to account for the proceeds of the special assessment.

Question 19

Assets held in trust that are restricted to benefit the citizenry in general or in support of he reporting government's programs would be reported as permanent funds if nonexpendable.

Question 20

The term "fiduciary funds" include agency,pension trust,investment trust,and permanent funds.

Question 21

Reporting for Defined Benefit Pension Plans requires two supplementary schedules; the Schedule of Funding Progress and the Schedule of Employers Contributions.

Question 22

Escheat property,often collected by the state,is to be reported either in a private-purpose trust fund or in the fund to which the property ultimately escheats.

Question 23

Defined contribution plans are required to pay retired employees a certain amount regardless of the amount contributed to the plan.

Question 24

The Fiduciary Funds are not included in the Government-Wide Financial Statements.

Question 25

Fiduciary Fund activities report in terms of Additions and Deductions.

Question 26

An investment trust fund is used to account for the external portion of a multi-government investment pool,when the reporting government is trustee.

Question 27

Governments that contribute to single employer and agent multiple-employer plans compute annual pension cost as the net pension obligation.

Question 28

Property that has been abandoned or property whose owners cannot be found is turned over to the state government until the legal owners can be found is known as community property.

Question 29

Fiduciary Fund activities report in terms of Revenues and Expenses.

Question 30

Pension Funds report the government's pension expense for the year.

Question 31

Investment Trust Funds account for only the external portion of investment pools.

Question 32

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

Question 33

Governments that contribute to single employer and agent multiple-employer plans compute annual pension cost as the normal cost.

Question 34

Governmental investments in equity securities that have a determinable fair value are to be reported at fair value and any unrealized gains and losses are to be reported separately from realized gains and losses in the governmental operating statements.

Question 35

Governments that contribute to single employer and agent multiple-employer plans compute annual pension cost as the annual required contributions.

Question 36

Fiduciary funds include agency funds,private-purpose trust funds,investment trust funds,and pension (or other employee benefit)trust funds.

Question 37

Governments that contribute to single employer and agent multiple-employer plans compute annual pension cost as the unfunded actuarial liability.

Question 38

Defined Benefit Pension Plans are required to pay retired employees an amount determined by formula,regardless of the amount contributed to the plan.

Question 39

Governments offering postemployment benefits to their retired employees must present two financial statements related to their plans:
the Statement of Plan Net Assets and the Statement of Changes in Plan Net Assets,as well as additional required supplementary information.

Question 40

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

Question 41

Defined contribution pension plans may report unfunded actuarial liabilities.

Question 42

Internal investment pools,which account for investments of the reporting entity,are to be reported within the funds providing the resources,when preparing financial statements.

Question 43

Derivatives include swaps,options,forward contracts and future contracts.

Question 44

If a derivative is effective in reducing a government's exposure to identifiable risks,the changes in the value of the derivative are reflected as investment gains or losses in the period that the value changes.

Question 45

In an agency fund,the government is acting as an agent for another entity and therefore they do not have rights to these types of funds.

Question 46

The Accrual Basis and Current Resource Measurement Focus are used for Private-Purpose,Investment Trust and Pension Funds.

Question 47

Equity investments should be recorded at fair market value unless a government has sufficient investments in a company to apply the equity method.

Question 48

GASB Statement No.53 establishes reporting requirements for governments entering into derivative instruments.

Question 49

An endowment to provide scholarships would be reported in a Private-purpose Trust Fund.

Question 50

The categories on the Statement of Changes in Fiduciary Net Assets are Additions and Deductions.

Question 51

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.

Question 52

Unfunded pension obligations are not reported in the fund-basis statements for governmental funds.

Question 53

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,a private-purpose trust has been formed.

Question 54

Pension trust funds are required to present a Schedule of Funding Progress and a Schedule of Employer Contributions as required supplementary information.

Question 55

Investments in a private-purpose trust fund should generally be reported at fair market value.

Question 56

GASB Statement No.52 requires that endowments report investments at fair value unless the investments are in real estate

Question 57

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,an investment trust has been formed.

Question 58

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,an agency trust fund has been formed.

Question 59

Investments in a pension trust fund should generally be reported using fair market value.

Question 60

Proprietary funds record unfunded pension obligations as a fund liability.

Question 61

______ funds are created when individuals or organizations contribute resources with the agreement that the income will be used to the citizenry or the government's programs.

A) Agency
B) Investment trust
C) Private-purpose trust
D) Permanent

Question 62

Which of the following statements is not correct with respect to Agency Funds?

A) Agency funds use modified accrual accounting
B) Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent.
C) Assets are offset by an equal amount of liabilities.
D) Assets and liabilities are recognized at the time the government becomes responsible for the assets.

Question 63

Which of the following is true regarding fiduciary funds?

A) Investment trust funds account for the internal portion of an investment pool, when a government is trustee for that pool.
B) Private-purpose trust funds account for resources that are administered by a government for the benefit of others, such as a fund held to distribute resources to local not-for-profit charities.
C) Both of the above.
D) Neither of the above.

Question 64

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

Question 65

GASB Statement 31,Accounting and Financial Reporting for Certain Investments and for External Investment Pools,does not apply to which of the following investment types?

A) External investment pools.
B) Open-end mutual funds.
C) Debt securities.
D) Investments of pension funds.

Question 66

Which of the following is true regarding fiduciary funds?

A) Fiduciary funds use the economic resources measurement focus and accrual accounting.
B) Fiduciary funds include pension (and other employee benefit) trust, investment trust, agency, and permanent funds.
C) Both of the above.
D) Neither of the above.

Question 67

Statement 53 (reporting of derivatives)applies to government financial statements prepared using the modified accrual basis of accounting.

Question 68

A fund that is the result of an agreement between a contributor and a government that the principal and/or income of trust assets is for the benefit of individuals,organizations,or other governments is a(n):

A) Agency fund
B) Private-Purpose Trust Fund
C) Investment Trust Fund
D) Pension Trust Fund

Question 69

Which of the following is true regarding the financial statements of fiduciary funds?

A) Fiduciary funds' financial statements include the Statement of Fiduciary Net Assets, the Statement of Changes in Fiduciary Net Assets, and the Statement of Fiduciary Cash Flows.
B) Fiduciary funds are accounted for using the economic resources measurement focus and accrual basis of accounting.
C) Both of the above.
D) Neither of the above.

Question 70

Statement 53 (reporting of derivatives)does not apply to proprietary or fiduciary funds.

Question 71

Which of the following is not an example of the function of an Agency Fund?

A) Payment of pension benefits to retired government employees
B) Collection of local government sales taxes by the state government
C) Collection of property taxes for the school district by an elected county government official.
D) Periodic distribution by the state government of county sales taxes

Question 72

A fund that is used to account for assets held by a government acting as agent for one or more other governments units or for individuals or private organizations is a(n):

A) Agency fund
B) Private-Purpose Trust Fund
C) Investment Trust Fund
D) Pension Trust Fund

Question 73

Which of the following is true regarding agency funds?

A) Agency funds report assets and liabilities, but not net assets, revenues or expenses.
B) Agency funds are often used to account for property tax collections by county governments for other governments.
C) Both of the above.
D) Neither of the above.

Question 74

The City of Sycamore has investments in bonds.These bonds have an amortized cost of $1,996,000.At year end,the financial press reports a market value of $2,002,000 for these bonds.The original cost of the bonds was $1,992,000.The par value at maturity will be $2,000,000.The amount at which the investments would be reported is:

A) $2,002,000
B) $2,000,000
C) $1,996,000
D) $1,992,000

Question 75

How are Fiduciary Funds presented in the Government-wide Financial Statements?

A) Combined with Internal Service Funds.
B) Combined with Business activities.
C) Combined with governmental activities.
D) None of the Above.

Question 76

______ funds are created when individuals or organizations contribute resources with the agreement that principal and/or income will be used to benefit individuals or nongovernmental organizations.

A) Agency
B) Investment trust
C) Private-purpose trust
D) Permanent

Question 77

A fund that exists when the government is the sponsor of a multigovernment investment pool and accounts for the external portion of the trust assets is a(n):

A) Agency fund
B) Private-Purpose Trust Fund
C) Investment Trust Fund
D) Pension Trust Fund

Question 78

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

A) Agency fund
B) Private-Purpose Trust Fund
C) Investment Trust Fund
D) Pension Trust Fund

Question 79

Which of the following is true regarding fiduciary funds?

A) Fiduciary funds are included in the fund basis statements but not in the government-wide.
B) Fiduciary funds are reported by fund type, not as major funds.
C) Both of the above.
D) Neither of the above.

Question 80

Which of the following is true regarding fiduciary funds?

A) Fiduciary funds are not included in the government-wide financial statements.
B) Fiduciary funds include agency, pension (and other employee benefit) trust, private-purpose trust, and investment trust funds.
C) Both of the above.
D) Neither of the above.