Question 1

Governments must present which of the following financial statements for fiduciary funds?

Accepted Answer

A) Statement of assets and benefits and statement of cash flows. 
B) Statement of fiduciary net assets and statement of changes in benefits, 
C) Statement of fiduciary net position and statement of changes in fiduciary net position. 
D) Statement of net assets and statement of accrued benefit obligations. 
A) Statement of assets and benefits and statement of cash flows. 
B) Statement of fiduciary net assets and statement of changes in benefits, 
C) Statement of fiduciary net position and statement of changes in fiduciary net position. 
D) Statement of net assets and statement of accrued benefit obligations. C

Question 2

The schedule of changes in long-term obligations contains an account "net pension obligation." Which of the following describes the event that gave rise to this account?

Accepted Answer

A) The actual contribution by a proprietary fund was less than the annual required contribution per the actuary. 
B) The actual contribution by a governmental fund was less than the annual required contribution per the actuary. 
C) The actuarially computed pension liability exceeded the pension plan assets. 
D) The actuarially computed pension liability was less than the pension plan assets. 
A) The actual contribution by a proprietary fund was less than the annual required contribution per the actuary. 
B) The actual contribution by a governmental fund was less than the annual required contribution per the actuary. 
C) The actuarially computed pension liability exceeded the pension plan assets. 
D) The actuarially computed pension liability was less than the pension plan assets. B

Question 3

The fiduciary fund financial statements in a government's annual financial report comprise

Accepted Answer

A) Consolidated statements only--no separate statements for individual pension plans. 
B) A separate column in each statement for each fiduciary fund type. 
C) A consolidated assets and benefits statement showing three classes of net assets. 
D) Statements reporting information by major fund. 
A) Consolidated statements only--no separate statements for individual pension plans. 
B) A separate column in each statement for each fiduciary fund type. 
C) A consolidated assets and benefits statement showing three classes of net assets. 
D) Statements reporting information by major fund. B

Question 4

Accounting for the employer's contribution to a defined benefit pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

Accepted Answer

A) True 
 B)False

Question 5

An employer may have a liability to a defined benefit pension plan other than for its annual required contributions,depending on the future financial health of the plan.

Accepted Answer

A) True 
 B)False

Question 6

Permanent funds focus on measuring current financial resources and use a modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 7

Financial assets reported by most investment trust funds of governments should be reported at

Accepted Answer

A) Cost 
B) Amortized historical cost. 
C) Fair value on the date of the financial statements. 
D) Fair value computed by a weighted-average approach. 
A) Cost 
B) Amortized historical cost. 
C) Fair value on the date of the financial statements. 
D) Fair value computed by a weighted-average approach.

Question 8

During the current year the private-purpose trust fund will recognize,related to the cash outflow:

Accepted Answer

A) $20,000 transfer-out. 
B) $20,000 expenses. 
C) $24,000 deduction from net position. 
D) $20,000 deduction from net position. 
A) $20,000 transfer-out. 
B) $20,000 expenses. 
C) $24,000 deduction from net position. 
D) $20,000 deduction from net position.

Question 9

A government receives a gift of cash and investments with a fair value of $200,000.The donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested.The $200,000 gift should be accounted for in which of the following funds?

Accepted Answer

A) General fund. 
B) Private-purpose trust fund. 
C) Agency fund. 
D) Permanent fund. 
A) General fund. 
B) Private-purpose trust fund. 
C) Agency fund. 
D) Permanent fund.

Question 10

Colleges that use a fixed rate of return approach to manage the distribution of income from their endowments must apply the same rate to determine how much investment income to report in their financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following activities of a government should be accounted for in a fiduciary fund?

Accepted Answer

A) Funds received from the federal government to support public transportation activities. 
B) Funds received from an individual who specified that the principal must be kept intact but the income can be used to support families of police officers killed in the line of duty. 
C) Funds received from the state government that must be used to purchase capital assets. 
D) Funds received from a contractor to assist with the development of utility infrastructure. 
A) Funds received from the federal government to support public transportation activities. 
B) Funds received from an individual who specified that the principal must be kept intact but the income can be used to support families of police officers killed in the line of duty. 
C) Funds received from the state government that must be used to purchase capital assets. 
D) Funds received from a contractor to assist with the development of utility infrastructure.

Question 12

On its year-end statement of financial position,the charity would report permanently restricted net assets of:

Accepted Answer

A) $1 million. 
B) $1.04 million. 
C) $1.03 million. 
D) $1.01 million. 
A) $1 million. 
B) $1.04 million. 
C) $1.03 million. 
D) $1.01 million.

Question 13

Maple City has a permanent fund that reported current-year investment earnings realized and unrealized)of $80,000.The endowment principal is $800,000 and the city council has adopted a policy of considering only the inflation-adjusted rate of return to be available for transfer to the recipient fund.During the current year the council declared the inflation-adjusted rate of return to be 8 percent.How much revenue would be recognized in the permanent fund?

Accepted Answer

A) $ 0. 
B) $ 64,000. 
C) $ 80,000. 
D) Insufficient information to determine. 
A) $ 0. 
B) $ 64,000. 
C) $ 80,000. 
D) Insufficient information to determine.

Question 14

Whether gains on the sale of a government endowment's investments should be considered additions to principal or expendable income for accounting purposes is:

Accepted Answer

A) An issue that has been resolved by federal law. 
B) Debatable,but generally resolved in favor of adding the gains to unrestricted assets expendable),absent donor or legal stipulations. 
C) A matter for governments to decide,independent of donor or legal considerations. 
D) Debatable,but generally resolved in favor of adding the gains to principal nonexpendable assets),absent donor or legal stipulations. 
A) An issue that has been resolved by federal law. 
B) Debatable,but generally resolved in favor of adding the gains to unrestricted assets expendable),absent donor or legal stipulations. 
C) A matter for governments to decide,independent of donor or legal considerations. 
D) Debatable,but generally resolved in favor of adding the gains to principal nonexpendable assets),absent donor or legal stipulations.

Question 15

In accounting for permanent funds only the income can be spent;the principal must be preserved intact.

Accepted Answer

A) True 
 B)False

Question 16

A plan's unfunded actuarially accrued liability is the excess of the:

Accepted Answer

A) Actuarially determined plan cost over the actual contribution. 
B) Actuarially determined plan cost over the plan assets. 
C) Actuarially determined pension liability over the plan assets. 
D) Actuarially determined pension liability over the total contributions 
A) Actuarially determined plan cost over the actual contribution. 
B) Actuarially determined plan cost over the plan assets. 
C) Actuarially determined pension liability over the plan assets. 
D) Actuarially determined pension liability over the total contributions

Question 17

Accounting for the employer's contribution to a defined contribution pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

Accepted Answer

A) True 
 B)False

Question 18

In which of the following funds would a government report depreciation expense?

Accepted Answer

A) Private-purpose trust fund. 
B) Agency fund. 
C) Permanent fund. 
D) None of the above 
A) Private-purpose trust fund. 
B) Agency fund. 
C) Permanent fund. 
D) None of the above

Question 19

The $200,000 gift would be reported in a an):

Accepted Answer

A) Special revenue fund. 
B) Private-purpose trust fund. 
C) Agency fund. 
D) Permanent fund. 
A) Special revenue fund. 
B) Private-purpose trust fund. 
C) Agency fund. 
D) Permanent fund.

Question 20

Which of the following is NOT true of agency funds?

Accepted Answer

A) Governments use them to account for resources held as trustee or agent for another government,fund,not-for-profit entity,or individual. 
B) They are required to use a modified accrual basis of accounting. 
C) They have no operations and therefore are not required to prepare financial statements. 
D) Agency fund assets are always offset by liabilities. 
A) Governments use them to account for resources held as trustee or agent for another government,fund,not-for-profit entity,or individual. 
B) They are required to use a modified accrual basis of accounting. 
C) They have no operations and therefore are not required to prepare financial statements. 
D) Agency fund assets are always offset by liabilities.

Governments must present which of the following financial statements for fiduciary funds?

The schedule of changes in long-term obligations contains an account "net pension obligation." Which of the following describes the event that gave rise to this account?

The fiduciary fund financial statements in a government's annual financial report comprise

Accounting for the employer's contribution to a defined benefit pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

An employer may have a liability to a defined benefit pension plan other than for its annual required contributions,depending on the future financial health of the plan.

Permanent funds focus on measuring current financial resources and use a modified accrual basis of accounting.

Financial assets reported by most investment trust funds of governments should be reported at

During the current year the private-purpose trust fund will recognize,related to the cash outflow:

A government receives a gift of cash and investments with a fair value of $200,000.The donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested.The $200,000 gift should be accounted for in which of the following funds?

Colleges that use a fixed rate of return approach to manage the distribution of income from their endowments must apply the same rate to determine how much investment income to report in their financial statements.

Which of the following activities of a government should be accounted for in a fiduciary fund?

On its year-end statement of financial position,the charity would report permanently restricted net assets of:

Whether gains on the sale of a government endowment's investments should be considered additions to principal or expendable income for accounting purposes is:

In accounting for permanent funds only the income can be spent;the principal must be preserved intact.

A plan's unfunded actuarially accrued liability is the excess of the:

Accounting for the employer's contribution to a defined contribution pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

In which of the following funds would a government report depreciation expense?

The $200,000 gift would be reported in a an):

Which of the following is NOT true of agency funds?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 10: Fiduciary Funds and Permanent Funds

Governments must present which of the following financial statements for fiduciary funds?

The schedule of changes in long-term obligations contains an account "net pension obligation." Which of the following describes the event that gave rise to this account?

The fiduciary fund financial statements in a government's annual financial report comprise

Accounting for the employer's contribution to a defined benefit pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

An employer may have a liability to a defined benefit pension plan other than for its annual required contributions,depending on the future financial health of the plan.

Permanent funds focus on measuring current financial resources and use a modified accrual basis of accounting.

Financial assets reported by most investment trust funds of governments should be reported at

During the current year the private-purpose trust fund will recognize,related to the cash outflow:

A government receives a gift of cash and investments with a fair value of $200,000.The donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested.The $200,000 gift should be accounted for in which of the following funds?

Colleges that use a fixed rate of return approach to manage the distribution of income from their endowments must apply the same rate to determine how much investment income to report in their financial statements.

Which of the following activities of a government should be accounted for in a fiduciary fund?

On its year-end statement of financial position,the charity would report permanently restricted net assets of:

Whether gains on the sale of a government endowment's investments should be considered additions to principal or expendable income for accounting purposes is:

In accounting for permanent funds only the income can be spent;the principal must be preserved intact.

A plan's unfunded actuarially accrued liability is the excess of the:

Accounting for the employer's contribution to a defined contribution pension plan is straight forward,because the employer is obligated only to make annual contributions in the amount specified in the plan terms.

In which of the following funds would a government report depreciation expense?

The $200,000 gift would be reported in a an):

Which of the following is NOT true of agency funds?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters