Deck 7: Fiduciary Funds, Inter-fund Transactions

Question 1

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

Answer 1

True

Question 2

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.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

Fiduciary Fund activities report in terms of Additions and Deductions.

Question 8

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

Question 9

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

Question 10

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 11

Fiduciary funds use the current financial resource measurement focus.

Question 12

Fiduciary funds are reported only in the fund-basis financial statements.

Question 13

Fiduciary Fund activities report in terms of Revenues and Expenses.

Question 14

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

Question 15

Fiduciary fund financial statements include the Statement of Fiduciary Net Position,Statement of Changes in Fiduciary Net Position,and Statement of Cash Flows.

Question 16

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

Question 17

Fiduciary funds use the accrual basis of accounting.

Question 18

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

Question 19

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

Question 20

The Fiduciary Funds are included in the Government-Wide Financial Statements.

Question 21

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

Question 22

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

Question 23

Net pension liabilities are reported in statements prepared using the economic resource measurement focus and accrual basis of accounting.

Question 24

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 25

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

Question 26

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

Question 27

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 28

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

Question 29

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

Question 30

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 31

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

Question 32

Governments should report the net pension liability in the governmental fund basis statements even if it is not expected to be paid from current financial resources.

Question 33

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 reverts.

Question 34

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

Question 35

The purpose of the Schedule of Changes in Net Pension Liability and Required Ratios (part of the required supplementary information)is to enable the reader to determine whether the pension plan is sufficiently funded.

Question 36

The purpose of a Statement of Fiduciary Net Position for a defined benefit pension plan is to enable the reader to determine whether the pension plan is sufficiently funded.

Question 37

If a government has no potential liability for payment of special assessment debt in the event of default by the property owners,then an agency fund may be used to account for the proceeds of the special assessment.

Question 38

Proprietary funds record the net pension liability as a fund liability.

Question 39

Governments with defined benefit pension plans will report a net pension liability in the government-wide Statement of Net Position if the amount the government anticipates paying to employees in the future is greater than the net fiduciary position of the pension trust fund.

Question 40

Pension trust funds are required to present a ten year Schedule of Changes in Net Pension Liability and Related Ratios as required supplementary information.

Question 41

Which of the following is not a fiduciary fund?

A) Private-Purpose Trust Fund.
B) Investment Trust Fund.
C) Pension Trust Fund.
D) Permanent Fund.

Question 42

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 43

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

Question 44

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

Question 45

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

Question 46

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 deferred outflows or deferred inflows in the period that the value changes.

Question 47

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 48

Assume a government makes a change of assumption that results in an increase in its estimate of the net pension liability. This will be recorded in the government-wide statements as an increase in the net pension liability and an increase in deferred outflows of resources.

Question 49

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 50

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 51

GASB requires that endowments report investments at fair value unless the investments are in real estate

Question 52

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

Question 53

Pension expenditures for governmental type funds are equal to the amounts paid to the pension fund for current year service plus any accruals for amounts to be paid from current financial resources.

Question 54

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

Question 55

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

Question 56

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 57

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 58

Which is true regarding the basis of accounting for fiduciary funds?

A) All four fiduciary fund types are accounted for using the same basis of accounting and measurement focus as proprietary funds.
B) Agency funds are accounted for using the same basis of accounting and measurement focus as governmental funds, trust funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
C) Trust funds are accounted for using the same basis of accounting and measurement focus as governmental funds, and agency funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
D) All four fiduciary fund types are accounted for using the same basis of accounting and measurement focus as governmental funds.

Question 59

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

Question 60

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 61

Which type of pension plan most commonly results in an unfunded actuarial liability?

A) Defined benefit plan.
B) Defined contribution.
C) Both A and B.
D) Neither A or B.

Question 62

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 63

______ 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 64

The tax agency fund of Orange County collected $7,000,000 for a school district,$3,000,000 for the county General Fund,and $5,000,000 for a municipality located in the County. County General Fund employees handle the collections,and a 2.5 percent collection fee is charged all units except the county. The total amount of revenue recognized by the county General Fund would be:

A) $ 390,000.
B) $3,300,000.
C) $3,390,000.
D) $15,300,000.

Question 65

Agency fund assets and liabilities are to be recognized :

A) At the time the government becomes responsible for the assets.
B) When they are available and measurable.
C) Only in the government-wide financial statements.
D) When the earnings process is complete and collection is reasonably assured.

Question 66

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 67

Which of the following statements is not true regarding agency funds?

A) Agency funds use modified accrual accounting.
B) Agency funds report only assets and liabilities; no fund equities, revenues, or expenditures are recorded.
C) Agency funds are reported in the fiduciary funds Statement of Fiduciary Net Position.
D) None of the above; all are true.

Question 68

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 69

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.

Question 70

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 71

A fund that is used to account for assets held by a government temporarily 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 72

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

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

Question 73

In an agency fund,assets are equal to:

A) Liabilities + Net Position
B) Net Position
C) Liabilities
D) There are no assets in an Agency Fund

Question 74

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

A) Fiduciary funds' financial statements include the Statement of Fiduciary Net Position, the Statement of Changes in Fiduciary Net Position, 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 75

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 76

Which of the following statements about agency funds is true?

A) An agency relationship that commonly results in the creation of an agency fund is the collection of taxes and other revenues by an official of one governmental unit for other governmental units.
B) GASB mandates that governments report special assessment resources in an agency fund only if the reporting government has no obligation to assume debt service on special assessment debt in the event property owners' default but merely perform the functions of billing and collecting the special assessments and paying interest and principal on the special assessment debt.
C) Both of the above.
D) Neither of the above.

Question 77

Which of the following is true regarding agency funds?

A) Agency funds report assets and liabilities, but not net position, 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 78

The terms used for classification of items on the Statement of Changes in Fiduciary Net Position are:

A) Revenues and Expenses.
B) Additions and Deductions.
C) Revenues and Expenditures.
D) Contributions and Expenses.

Question 79

The operations of agency funds will be included in which of the following statements?

A) The fiduciary funds Statement of Fiduciary Net Position
B) The Statement of Changes in Fiduciary Net Position
C) The Government-wide Financial Statements
D) All of the above

Question 80

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