Exam 10: Pensions and Other Fiduciary Activities

Carl 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):

Several years ago, a donor gave $5 million to Denton City and specified that the principal was to be kept intact but the earnings were to be used to support the operations of 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?

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

The concept of major versus nonmajor funds does not apply to permanent funds, as it does to governmental and proprietary 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?

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?

Scofield City received a donation from the estate of the late Lisa O'Reilly to be used to support the city's public library. The gift consisted of $200,000 cash and a portfolio of securities with a market value of $350,000. The securities have a book value of $250,000. The donor stipulated that the principal of the gift, including investment gains (realized and unrealized) but excluding investment losses, must be kept intact. The income must be used to care for and maintain the book collection at the newly renamed O'Reilly Public Library. All appropriate costs, including investment losses, may be charged against the revenues yearly to determine the amount available for the specified purposes. During the year, the city engaged in the following transactions on behalf of the library. REQUIRED: Prepare the appropriate entries in the city's permanent fund. a) Accepted the donation. b) Received dividends and interest of $18,000. c) Purchased securities for $200,000. d) Sold securities that were part of the original gift (market value at date of gift $72,000; book value in hands of donor $68,000) for $78,000. e) Sold some of the securities that were acquired in transaction (c) for $53,000. They were acquired at a price of $55,000. f) The portfolio of securities at year-end had a market value of $432,000. g) Closed the fund's revenue and expense accounts and transferred the amount available for expenditure to the appropriate fund. Close the transfer account.

Carl 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)

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

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

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

GASB standards require a defined benefit pension plan to report investments at fair market value even if the plan's actuary uses a different value in determining the employer's contribution requirements.

Which of the following is NOT a fiduciary fund?