Exam 8: Accounting for Fiduciary Activities-Agency and Trust Funds

When a cash and investment pool of a certain city was established,the debt service fund transferred investments to the pool having a cost of $3,000,000 but a current fair market value of $3,100,000.To record this transaction,the journal entry made by the debt service fund will include:

Pension plans are required to report two schedules,a schedule of funding progress and a schedule of employer contributions as required supplementary information (RSI)in their stand-alone financial reports and in pension plan financial information reported in the CAFR of sponsoring government.

Under current GASB standards,how are other postemployment retirement benefits (OPEB)reported?

On January 1,Forrester County is holding investments for Tinsel Town valued at $500,000 in an investment pool,accounted for in an investment trust fund.On January 1,Valley School District invests $1,500,000 in the pool.Earnings on pooled investments for the six months ended June 30 totaling $300,000 were received in cash. Required 1)What percentage interest in the pool is held by the town and the school district? 2) (a)Show the entry in the Investment Trust Fund to record the School District's investment in the pool. (b)Show the entry in the Investment Trust Fund to summarize the collection of interest for the six-month period. (c)Show the entry in the Investment Trust Fund to record the liability to the funds for interest earned on pooled investments,assuming that the interest will be paid to the town and school district. (d)Independent of part (c),show the entry in the Investment Trust Fund to record the distribution of the interest earned on pooled investments,assuming that the interest will be reinvested by the town and school district.

A local golfer contributed $100,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the city golf course.The $100,000 would most appropriately be recorded in a(an)

Public employee retirement systems should utilize budgetary accounts in the same manner that General Funds and special revenue funds should.

Which of the following is the most reliable means of distinguishing a trust relationship from an agency relationship for purposes of deciding which type of fiduciary fund should be used?

Which basis of accounting best maintains the original principal of a trust?

Other postemployment benefits (OPEB)include benefits other than pensions,such as health care,life insurance,and long-term care.

Which of the statements concerning agency funds is true?

Ingham County collects,in addition to its own taxes,taxes for other units.Tax levied for 2014 were as follows: Collections from the 2014 levies amounted to $3,550,000 and were distributed in proportion to the original levies,less a 1% collection fee charged Mason City and the Mason School District.Collection fees are remitted to the Ingham County General Fund. Required 1)Record the tax levies in the Ingham County Tax Agency Fund. 2)Record the collection from the 2014 tax levies in the Ingham County Tax Agency Fund and the specific liabilities owed each fund and unit (Round all amounts to the nearest whole dollar.) 3)Record in the Ingham County Tax Agency Fund the transfer of collected taxes to each fund and unit.

Which of the following accounts is least likely to be used by a tax agency fund?

The cash and investment pool of Lake City allocates dividends,interest,and capital gains and losses on a periodic basis.When the cash and investment pool accrues interest earned on investments in debt securities,pending allocation to participating funds,it would credit which of the following accounts?

An agency fund accounts for assets held by a government for the long-term in the capacity of a trustee for an individual,organization,other fund,or other government.

Which of the following activities would most appropriately be recorded by an agency fund?

Annual pension cost is the actuarially determined amount that an employer should contribute in the current year to maintain adequate funding status.

Employer contributions to a public employee retirement system (PERS)should be reported as

Employer (and employee,if applicable)contributions to public employee retirement systems should be based on actuarial computations.

If the fair value of stock received by a private-purpose trust fund differs from the par value of the stock,the premium or discount should be amortized over the remaining life of the stock.

Resources that are held in trust for the benefit of the government's own programs or its citizenry should be accounted for using a governmental fund rather than a fiduciary fund.