Question 1

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.

Question 2

Fiduciary funds are excluded from the government-wide financial statements.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Citizens within a defined geographic area of Dolan City created a special assessment district to facilitate the construction of sidewalks.The city was responsible for overseeing the entire construction project.The city issued bonds in its own name to pay the contractor for the construction.However, the city was not responsible in any manner for the bonds.The bonds were secured by the special assessments that are levied against properties within the special assessment district.Collections of special assessments would be recorded in which of the following funds of Dolan City?

Accepted Answer

A) Special assessment fund. 
B) Agency fund. 
C) Special revenue fund. 
D) Debt service fund. 
A) Special assessment fund. 
B) Agency fund. 
C) Special revenue fund. 
D) Debt service fund.

Question 5

During the fiscal year ended December 31, 2013, Glen City's general fund contributed $60 million to a defined benefit pension plan for city employees.On February 27, 2014, the general fund made an additional $3 million contribution related to the 2013 pension contribution requirements.The actuarially determined contribution requirement for 2013 is $65 million.The amount of pension expenditure recognized by the general fund for 2013 should be:

Accepted Answer

A) $ 0 
B) $ 60 million 
C) $ 63 million 
D) $ 65 million 
A) $ 0 
B) $ 60 million 
C) $ 63 million 
D) $ 65 million

Question 6

In which of the following funds would the account "net pension obligation" be most likely to appear?

Accepted Answer

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

Question 7

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 position-benefits. 
D) Expense.
Use the following information to answer Questions #5-6.
In the current year, Loma City earned $24,000 on the principal of a private-purpose trust fund but disbursed only $20,000. 
A) Transfer-out. 
B) Expenditure. 
C) Deduction from net position-benefits. 
D) Expense.
Use the following information to answer Questions #5-6.
In the current year, Loma City earned $24,000 on the principal of a private-purpose trust fund but disbursed only $20,000.

Question 8

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 9

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 10

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 11

Lomond City receives a federal grant to assist in nutrition programs for its senior citizens.The city will select the contractors that will provide meals and approve the participants in the program.The proceeds of this grant should be accounted for in which of the following funds of the city?

Accepted Answer

A) A governmental fund. 
B) An enterprise fund. 
C) An agency fund. 
D) A private-purpose trust fund. 
A) A governmental fund. 
B) An enterprise fund. 
C) An agency fund. 
D) A private-purpose trust fund.

Question 12

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 13

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 14

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 15

A defined contribution pension plan is one in which the employer agrees to do which of the following?

Accepted Answer

A) To make payments to a specified pension plan with no guarantee of a specific pension amount to be paid to the employees. 
B) To make actuarially determined payments to a pension plan AND to guarantee that the employees will receive a specified pension benefit (usually determined by length of service and salary). 
C) To make actuarially determined payments to a pension plan that guarantees employees will receive a specified pension (usually determined by length of service and salary). 
D) To pay specified amounts (usually determined by length of service and salary)to the employees upon retirement. 
A) To make payments to a specified pension plan with no guarantee of a specific pension amount to be paid to the employees. 
B) To make actuarially determined payments to a pension plan AND to guarantee that the employees will receive a specified pension benefit (usually determined by length of service and salary). 
C) To make actuarially determined payments to a pension plan that guarantees employees will receive a specified pension (usually determined by length of service and salary). 
D) To pay specified amounts (usually determined by length of service and salary)to the employees upon retirement.

Question 16

Fiduciary funds focus on current financial resources and use the full accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Investment trust funds are one of four types of fiduciary funds.What is the purpose of investment trust funds? What is the nature of the assets and liabilities that they report? Can the government that provides an investment trust fund invest its own assets in that fund?

Accepted Answer

Investment trust funds are used by gover

Question 19

You are asked by a wealthy businesswoman to help construct a permanent endowment for a local university.She asks you whether you believe the university should be required to add investment gains to the principal of the endowment or whether it would be preferable for the gains to be available for spending.How would you respond and why?

Accepted Answer

By making the investment gains nonexpend

Question 20

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

Accepted Answer

A) True 
 B)False

Which of the following is NOT true of agency funds?

Fiduciary funds are excluded from the government-wide financial statements.

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

In which of the following funds would the account "net pension obligation" be most likely to appear?

The $20,000 transfer would be reported by the fund that made the transfer as a (an)

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

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

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

Lomond City receives a federal grant to assist in nutrition programs for its senior citizens.The city will select the contractors that will provide meals and approve the participants in the program.The proceeds of this grant should be accounted for in which of the following funds of the city?

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

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?

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

A defined contribution pension plan is one in which the employer agrees to do which of the following?

Fiduciary funds focus on current financial resources and use the full accrual basis of accounting.

Investment trust funds are one of four types of fiduciary funds.What is the purpose of investment trust funds? What is the nature of the assets and liabilities that they report? Can the government that provides an investment trust fund invest its own assets in that fund?

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

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

Which of the following is NOT true of agency funds?

Fiduciary funds are excluded from the government-wide financial statements.

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

In which of the following funds would the account "net pension obligation" be most likely to appear?

The $20,000 transfer would be reported by the fund that made the transfer as a (an)

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

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

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

Lomond City receives a federal grant to assist in nutrition programs for its senior citizens.The city will select the contractors that will provide meals and approve the participants in the program.The proceeds of this grant should be accounted for in which of the following funds of the city?

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

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?

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

A defined contribution pension plan is one in which the employer agrees to do which of the following?

Fiduciary funds focus on current financial resources and use the full accrual basis of accounting.

Investment trust funds are one of four types of fiduciary funds.What is the purpose of investment trust funds? What is the nature of the assets and liabilities that they report? Can the government that provides an investment trust fund invest its own assets in that fund?

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

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