Question 1

Financial assets reported by 2a7-like investment pools should be reported at

Accepted Answer

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

Question 2

Use the following information to answer Questions 
Previously a local charity received a $1 million gift, the income from which was restricted to support activities for senior citizens.During the current year the endowment earned $40,000 of interest revenues, of which the charity designated $30,000 to support senior citizen activities.
-Cedar 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%.How much revenue would be recognized in the permanent fund?

Accepted Answer

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

Question 3

Required disclosure by a government General Fund related to its pension plan does NOT include which of the following?

Accepted Answer

A) The employer's funding policy. 
B) The components of the pension cost. 
C) The key assumptions used in determining the pension costs. 
D) The present value of the future benefits to be paid. 
A) The employer's funding policy. 
B) The components of the pension cost. 
C) The key assumptions used in determining the pension costs. 
D) The present value of the future benefits to be paid.

Question 4

Per GASB Statement No.34, permanent funds are classified as fiduciary funds.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Use the following information to answer Questions 
The City received $200,000 to help maintain a local art museum that is owned and operated by a not-for-profit organization.During the year the City transferred net earnings of $20,000 to the appropriate entity/fund.
-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 7

What basis of accounting is used to account for the transactions of a government's permanent fund?

Accepted Answer

A) Full accrual basis of accounting. 
B) Modified accrual basis of accounting. 
C) Cash basis of accounting. 
D) Budgetary basis of accounting. 
A) Full accrual basis of accounting. 
B) Modified accrual basis of accounting. 
C) Cash basis of accounting. 
D) Budgetary basis of accounting.

Question 8

Use the following information to answer Questions 
The City received $200,000 to help maintain a local art museum that is owned and operated by a not-for-profit organization.During the year the City transferred net earnings of $20,000 to the appropriate entity/fund.
-The $20,000 transfer would be reported by the fund that made the transfer as a an

Accepted Answer

A) Transfer out. 
B) Expenditure. 
C) Deduction from Net Assets-Benefits. 
D) Expense. 
A) Transfer out. 
B) Expenditure. 
C) Deduction from Net Assets-Benefits. 
D) Expense.

Question 9

Several years ago, a donor gave $5 million to the City and specified that the principal was to be kept intact but the earnings were to be used to support operations of the city parks.During the current year, the City earned $300,000 on the gift.To what type of fund, should the City transfer the $300,000 earnings?

Accepted Answer

A) It should not make any transfers.The $300,000 should remain in the City's permanent fund. 
B) A special revenue fund. 
C) The general fund. 
D) An enterprise fund. 
A) It should not make any transfers.The $300,000 should remain in the City's permanent fund. 
B) A special revenue fund. 
C) The general fund. 
D) An enterprise fund.

Question 10

Permanent funds are classified as

Accepted Answer

A) Governmental funds. 
B) Proprietary funds. 
C) Fiduciary funds. 
D) Trust funds. 
A) Governmental funds. 
B) Proprietary funds. 
C) Fiduciary funds. 
D) Trust funds.

Question 11

A governmental entity 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 12

In an agency fund, assets always equal fund balances because there are no liabilities.

Accepted Answer

A) True 
 B)False

Question 13

Hill City Light & Water a proprietary fund contributes to a defined benefit plan for its employees.During 2011, Hill City contributed $36 million to its pension plan.The City also made an additional $4 million contribution related to 2010.The actuarially determined contribution requirement for 2011 was $43 million.The amount of pension expense recognized by Hill City Light & Water for 2011 should be:

Accepted Answer

A) $ 0 
B) $ 36 million 
C) $ 40 million 
D) $ 43 million 
A) $ 0 
B) $ 36 million 
C) $ 40 million 
D) $ 43 million

Question 14

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 15

Which of the following is NOT a criterion that an employer's annual required contribution must satisfy to be considered acceptable?

Accepted Answer

A) It must consist of the employer's normal cost plus a provision for amortizing the plan's unfunded actuarially accrued liability. 
B) Actual assumptions must be in accordance with standards of the Actuarial Standards Board. 
C) Actuarial value of pension plan assets must be based on market values on the financial statement date. 
D) Assumptions as to investment earnings should be based on long-term projections. 
A) It must consist of the employer's normal cost plus a provision for amortizing the plan's unfunded actuarially accrued liability. 
B) Actual assumptions must be in accordance with standards of the Actuarial Standards Board. 
C) Actuarial value of pension plan assets must be based on market values on the financial statement date. 
D) Assumptions as to investment earnings should be based on long-term projections.

Question 16

Use the following information to answer Questions 
Previously a local charity received a $1 million gift, the income from which was restricted to support activities for senior citizens.During the current year the endowment earned $40,000 of interest revenues, of which the charity designated $30,000 to support senior citizen activities.
-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 17

Not-for-profits report all investment gains and losses on endowments as additions to temporarily restricted net assets, regardless of donor-imposed restrictions.

Accepted Answer

A) True 
 B)False

Question 18

Use the following information to answer Questions 
Previously a local charity received a $1 million gift, the income from which was restricted to support activities for senior citizens.During the current year the endowment earned $40,000 of interest revenues, of which the charity designated $30,000 to support senior citizen activities.
-On its year-end statement of activities, the charity would report interest revenues of:

Accepted Answer

A) $0 
B) $30,000 
C) $40,000 
D) None of the above. 
A) $0 
B) $30,000 
C) $40,000 
D) None of the above.

Question 19

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 20

Liabilities reported in pension trust funds consist of

Accepted Answer

A) Liabilities accrued using the accrual basis of accounting, including the actuarial accrued liability for the plan. 
B) Liabilities accrued using the modified accrual basis of accounting, excluding the actuarial accrued liability for the plan. 
C) Liabilities accrued using the accrual basis of accounting, excluding the actuarial accrued liability for the plan. 
D) Liabilities accrued using the modified accrual basis of accounting, including the plan benefits that will be paid with measurable and available financial resources. 
A) Liabilities accrued using the accrual basis of accounting, including the actuarial accrued liability for the plan. 
B) Liabilities accrued using the modified accrual basis of accounting, excluding the actuarial accrued liability for the plan. 
C) Liabilities accrued using the accrual basis of accounting, excluding the actuarial accrued liability for the plan. 
D) Liabilities accrued using the modified accrual basis of accounting, including the plan benefits that will be paid with measurable and available financial resources.

Financial assets reported by 2a7-like investment pools should be reported at

Required disclosure by a government General Fund related to its pension plan does NOT include which of the following?

Per GASB Statement No.34, permanent funds are classified as fiduciary funds.

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

What basis of accounting is used to account for the transactions of a government's permanent fund?

Permanent funds are classified as

A governmental entity 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?

In an agency fund, assets always equal fund balances because there are no liabilities.

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.

Which of the following is NOT a criterion that an employer's annual required contribution must satisfy to be considered acceptable?

Not-for-profits report all investment gains and losses on endowments as additions to temporarily restricted net assets, regardless of donor-imposed restrictions.

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.

Liabilities reported in pension trust funds consist of

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

Financial assets reported by 2a7-like investment pools should be reported at

Required disclosure by a government General Fund related to its pension plan does NOT include which of the following?

Per GASB Statement No.34, permanent funds are classified as fiduciary funds.

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

What basis of accounting is used to account for the transactions of a government's permanent fund?

Permanent funds are classified as

A governmental entity 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?

In an agency fund, assets always equal fund balances because there are no liabilities.

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.

Which of the following is NOT a criterion that an employer's annual required contribution must satisfy to be considered acceptable?

Not-for-profits report all investment gains and losses on endowments as additions to temporarily restricted net assets, regardless of donor-imposed restrictions.

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.

Liabilities reported in pension trust funds consist of

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