Deck 7: Fiduciary Trustfunds

Question 1

Private-purpose trust funds account for donated resources that benefit the general citizenry.

Answer 1

False

Question 2

Agency funds have no fund equity.

Answer 2

True

Question 3

Fiduciary funds are reported in consolidated statement of Changes in Fiduciary Net Assets and Balance Sheet.

Answer 3

False

Question 4

Fiduciary funds use accrual accounting.

Question 5

GASB Standards require that IRS 457 Deferred Compensation Plans,if reported,be reported as pension trust funds.

Question 6

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

Question 7

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 8

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

Question 9

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

Question 10

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 11

Assets held in trust for other governmental funds or for purposes of the governmental unit would be reported as permanent funds if nonexpendable.

Question 12

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

Question 13

If a government had two pension plans; one a locally administered plan for which it is trustee and one a statewide plan to which it contributes; the government would report only the locally administered plan as a pension trust fund in the basic financial statements.

Question 14

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 15

Assets held in trust for other governmental funds or for purposes of the governmental unit would be reported as special revenue funds if expendable.

Question 16

Governmental investments in debt securities,in all cases,are to be reported at amortized cost.

Question 17

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.

Question 18

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 19

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

Question 20

Agency fund assets and liabilities are accrued at year end.

Question 21

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

Question 22

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

Question 23

Fiduciary Fund activities report in terms of Additions and Deductions.

Question 24

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

Question 25

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

Question 26

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

Question 27

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

Question 28

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

Question 29

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 30

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 escheat property.

Question 31

Private-purpose Trust Funds are used to report trust arrangements,like scholarship endowments.

Question 32

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 33

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

Question 34

Fiduciary Funds use the Accrual basis of accounting and are not included in the government-wide financial statements.

Question 35

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

Question 36

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

Question 37

Fiduciary Fund activities report in terms of Revenues and Expenses.

Question 38

Pension Funds are used to account for assets provided to pension trusts.

Question 39

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

Question 40

A defined benefit plan will never have unfunded actuarial liabilities.

Question 41

Proprietary funds record unfunded pension obligations as a fund liability.

Question 42

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 has been formed.

Question 43

Defined contribution plans usually report unfunded actuarial liabilities.

Question 44

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

Question 45

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

Question 46

Financial reporting requirements for a defined benefit pension plan includes a schedule of employee contributions.

Question 47

Fiduciary Funds are reported by fund type.

Question 48

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

Question 49

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

Question 50

Investments in a private-purpose trust fund should generally be reported using cost basis.

Question 51

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 52

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 53

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 54

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

Question 55

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

Question 56

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

Question 57

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

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,a private-purpose trust has been formed.

Question 59

Investments in a private-purpose trust fund should generally be reported using the equity method.

Question 60

Fiduciary Funds are reported by activity.

Question 61

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 62

If a hedge derivative is deemed ineffective are classified as investment purpose.

Question 63

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 64

Ford County levies for its General Fund $2,000,000 in property taxes.In addition,the county is responsible for collecting $4,000,000 in property taxes for the consolidated school district and $1,000,000 in property taxes for a town within the county.2% of all taxes levied are expected to be uncollectible.When recording the levies in an agency fund,what amount would Ford County record as Taxes Receivable for Other Governments - Current and Due to Other Governments?

A) $6,900,000.
B) $5,000,000.
C) $7,000,000.
D) $4,900,000.

Question 65

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 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

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 68

GASB Statement No.52 requires that endowments with investment real estate report those assets at historical cost.

Question 69

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

Question 70

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

Question 71

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

Question 72

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

Question 73

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?

A) The City would maintain trust funds for the police and fire plans but not the statewide plan.
B) When making contributions from General Fund resources to the police and fire plans, the General Fund would debit Other Financing Sources-Transfers Out and the Pension Trust Fund would credit Transfers In.
C) Both of the above.
D) Neither of the above.

Question 74

If a derivative is an investment derivative,the changes in the value of the derivative are deferred and reported in the statement of net assets.

Question 75

Changes in the value of hedge derivatives are reported in the Statement of Net Assets.

Question 76

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

Question 77

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 78

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 79

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

A) Payment of interest and principle on long-term debt.
B) Collection of local government sales taxes by the state government.
C) Collection of property taxes for the school district collected by an elected county official.
D) Periodic distribution by state government of county gasoline taxes.

Question 80

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.