Question 1

In contrast to most private-sector pension plans, most government plans are defined contribution plans.

Accepted Answer

A) True 
 B)False

Question 2

Required disclosure by the general fund of a government 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 cost. 
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 cost. 
D) The present value of the future benefits to be paid.

Question 3

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

Accepted Answer

A) $40,000. 
B) $ 0. 
C) $30,000. 
D) $1.04 million. 
A) $40,000. 
B) $ 0. 
C) $30,000. 
D) $1.04 million.

Question 4

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.
Use the following information to answer Questions #14-16
Previously a local private-sector 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. 
A) Full accrual basis of accounting. 
B) Modified accrual basis of accounting. 
C) Cash basis of accounting. 
D) Budgetary basis of accounting.
Use the following information to answer Questions #14-16
Previously a local private-sector 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.

Question 5

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

Accepted Answer

A) $24,000 revenues. 
B) $20,000 revenues. 
C) $24,000 addition to net position. 
D) $20,000 addition to net position. 
A) $24,000 revenues. 
B) $20,000 revenues. 
C) $24,000 addition to net position. 
D) $20,000 addition to net position.

Question 6

A donor gives your city $100,000 to be used to support youth recreational programs.What type of fund should be used to account for this gift? How or why did you select this fund? Include in your answer other types of funds that could be considered to account for similar donations and why you did not select one of those funds.

Accepted Answer

The gift should be reported in a special

Question 7

How does a defined contribution pension plan differ from a defined benefit pension plan? What are some of the advantages and disadvantages of each type of plan? How do they differ for accounting and financial reporting? Which type of plan would you prefer to belong to? Why?

Accepted Answer

Under a defined contribution pension pla

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

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.

Question 12

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 13

Under GASB standards, agency funds are excluded from the face of the government-wide financial statements.What are agency funds? Do you believe they should be presented in the government-wide statements? Could they--or should they--be presented elsewhere?

Accepted Answer

Agency funds account for resources held

Question 14

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.

Question 15

Dale City Light & Water (a proprietary fund)contributes to a defined benefit pension plan for its employees.During 2014, the city contributed $36 million to the pension plan.The city also made a $4 million contribution related to 2013.The actuarially determined contribution requirement for 2014 was $43 million.The amount of pension expense recognized by Dale City Light & Water for 2014 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 16

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 17

Ashby City receives a federal grant to assist in nutrition programs for its senior citizens.Senior citizens whose income is below a specified amount (the amount was specified by the Federal government)are eligible to participate in the program.Monthly checks of $100 (this amount was specified by the Federal government)will be mailed to eligible senior citizens.The proceeds of this grant should be accounted for in which of the following funds of the city?

Accepted Answer

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

Question 18

Which of the following would NOT be accounted for in a fiduciary fund of a government?

Accepted Answer

A) Nonexpendable resources held for the benefit of other governments. 
B) Nonexpendable resources held for the benefit of the government holding the resources. 
C) Expendable resources held for the benefit of other governments. 
D) Funds held as an agent for other entities. 
A) Nonexpendable resources held for the benefit of other governments. 
B) Nonexpendable resources held for the benefit of the government holding the resources. 
C) Expendable resources held for the benefit of other governments. 
D) Funds held as an agent for other entities.

Question 19

During the year, a state-owned university received a $5 million gift.The donor specified that the principal of the gift must be held intact for 3 years, but the earnings from the gift can be used to support technology improvements in the college of business.At the end of the 3 years, the donor together with the university president and the college dean will decide how the $5 million gift can be used.The university will report the gift in what type of fund?

Accepted Answer

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

Question 20

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

In contrast to most private-sector pension plans, most government plans are defined contribution plans.

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

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

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

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

How does a defined contribution pension plan differ from a defined benefit pension plan? What are some of the advantages and disadvantages of each type of plan? How do they differ for accounting and financial reporting? Which type of plan would you prefer to belong to? Why?

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

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.

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

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?

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

Under GASB standards, agency funds are excluded from the face of the government-wide financial statements.What are agency funds? Do you believe they should be presented in the government-wide statements? Could they--or should they--be presented elsewhere?

Liabilities reported in pension trust funds consist 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:

Which of the following would NOT be accounted for in a fiduciary fund of a government?

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.

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 Notforprofit Organizations

Federal Government Accounting

Filters

Exam 10: Pensions and Other Fiduciary Activities

In contrast to most private-sector pension plans, most government plans are defined contribution plans.

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

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

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

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

How does a defined contribution pension plan differ from a defined benefit pension plan? What are some of the advantages and disadvantages of each type of plan? How do they differ for accounting and financial reporting? Which type of plan would you prefer to belong to? Why?

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

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.

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

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?

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

Under GASB standards, agency funds are excluded from the face of the government-wide financial statements.What are agency funds? Do you believe they should be presented in the government-wide statements? Could they--or should they--be presented elsewhere?

Liabilities reported in pension trust funds consist 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:

Which of the following would NOT be accounted for in a fiduciary fund of a government?

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.

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 Notforprofit Organizations

Federal Government Accounting

Filters