Question 1

Describe the accounting treatment of Agency Funds,including the purpose,basis of accounting,and required financial statements

Accepted Answer

•Agency funds are used to account for assets held by a government acting as agent for one or more other governmental units or for individuals or private organizations.Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent.
•Agency funds use the accrual basis of accounting to measure assets and liabilities. Assets are offset by an equal amount of liabilities; therefore there is no fund equity.Revenues and expenses are not recognized in the accounts.Assets and liabilities are recognized at the time the government becomes responsible for the assets.
•The assets and liabilities of agency funds should be included in the fiduciary funds Statement of Fiduciary Net Position.The operations of agency funds are not included in the Statement of Changes in Fiduciary Net Position.The Comprehensive Annual Financial Report should include a Combining Statement of Changes in Assets and Liabilities-All Agency Funds.

Question 2

Contrast the purpose of Private-purpose Trust Funds and Permanent Funds.

Accepted Answer

In both circumstances,donors have provided resources to generate earnings to support some activity. If the activity benefits the general citizenry or the overall government,it is classified as a permanent fund. If the activity benefits individuals or private organizations,it is classified as a private-purpose trust fund.

Question 3

Which type of pension plan is required to pay out a certain sum,generally based on a percentage of salary upon retirement and the number of years of service?

Accepted Answer

A)  Defined Benefit 
B)  Defined Contribution 
C)  Contributory 
D)  Noncontributory 
A)  Defined Benefit 
B)  Defined Contribution 
C)  Contributory 
D)  Noncontributory A

Question 4

Agency fund assets are offset by liabilities equal in amount,so no fund equity exists.

Accepted Answer

A) True 
 B)False

Question 5

Escheat property,often collected by the state,is to be reported either in a private-purpose trust fund or in the fund to which the property ultimately reverts.

Accepted Answer

A) True 
 B)False

Question 6

Internal investment pools,which account for investments of the reporting entity,are to be reported within the funds providing the resources,when preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 7

The term "fiduciary funds" include agency,pension trust,investment trust,and private purpose trust funds.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is correct with respect to GASB Statement No.53 which establishes reporting requirements for governments entering into derivative instruments?

Accepted Answer

A)  Changes in the value of hedge derivatives are deferred and reported in the Statement of Net Position. 
B)  If a derivative is an investment derivative, the changes in the value of the derivative are deferred and reported in the Statement of Net Position. 
C)  Statement No. 53 does not apply to proprietary funds. 
D)  Statement No. 53 applies to government financial statements prepared using the modified accrual basis of accounting. 
A)  Changes in the value of hedge derivatives are deferred and reported in the Statement of Net Position. 
B)  If a derivative is an investment derivative, the changes in the value of the derivative are deferred and reported in the Statement of Net Position. 
C)  Statement No. 53 does not apply to proprietary funds. 
D)  Statement No. 53 applies to government financial statements prepared using the modified accrual basis of accounting.

Question 9

In an agency fund,assets are equal to:

Accepted Answer

A)  Liabilities + Net Position 
B)  Net Position 
C)  Liabilities 
D)  There are no assets in an Agency Fund 
A)  Liabilities + Net Position 
B)  Net Position 
C)  Liabilities 
D)  There are no assets in an Agency Fund

Question 10

A fund that exists when a government is the trustee for a defined benefit pension plan,or a defined contribution pension plan is a(n):

Accepted Answer

A)  Agency fund 
B)  Private-Purpose Trust Fund 
C)  Investment Trust Fund 
D)  Pension Trust Fund 
A)  Agency fund 
B)  Private-Purpose Trust Fund 
C)  Investment Trust Fund 
D)  Pension Trust Fund

Question 11

Which of the following is true regarding fiduciary funds?

Accepted Answer

A)  Fiduciary funds use the economic resources measurement focus and accrual accounting. 
B)  Fiduciary funds include pension (and other employee benefit) trust, investment trust, agency, and permanent funds. 
C)  Both of the above. 
D)  Neither of the above. 
A)  Fiduciary funds use the economic resources measurement focus and accrual accounting. 
B)  Fiduciary funds include pension (and other employee benefit) trust, investment trust, agency, and permanent funds. 
C)  Both of the above. 
D)  Neither of the above.

Question 12

Which of the following statements about agency funds is true?

Accepted Answer

A)  An agency relationship that commonly results in the creation of an agency fund is the collection of taxes and other revenues by an official of one governmental unit for other governmental units. 
B)  GASB mandates that governments report special assessment resources in an agency fund only if the reporting government has no obligation to assume debt service on special assessment debt in the event property owners' default but merely perform the functions of billing and collecting the special assessments and paying interest and principal on the special assessment debt. 
C)  Both of the above. 
D)  Neither of the above. 
A)  An agency relationship that commonly results in the creation of an agency fund is the collection of taxes and other revenues by an official of one governmental unit for other governmental units. 
B)  GASB mandates that governments report special assessment resources in an agency fund only if the reporting government has no obligation to assume debt service on special assessment debt in the event property owners' default but merely perform the functions of billing and collecting the special assessments and paying interest and principal on the special assessment debt. 
C)  Both of the above. 
D)  Neither of the above.

Question 13

Donated resources that benefit individuals or private organizations are reported in a private-purpose trust fund.

Accepted Answer

A) True 
 B)False

Question 14

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,an agency trust fund has been formed.

Accepted Answer

A) True 
 B)False

Question 15

The City of DeKalb contributes to three pension plans: (1)a statewide pension plan for nonuniformed personnel,(2)a locally administered plan for police officers,and (3)a locally administered plan for firefighters. The City is trustee for the plans for police officers and firefighters. Which of the following is true?

Accepted Answer

A)  The City would maintain trust funds for the police and fire plans but not the statewide plan. 
B)  When making contributions from General Fund resources to the police and fire plans, the General Fund would debit Other Financing Sources-Transfers Out and the Pension Trust Fund would credit Transfers In. 
C)  Both of the above. 
D)  Neither of the above. 
A)  The City would maintain trust funds for the police and fire plans but not the statewide plan. 
B)  When making contributions from General Fund resources to the police and fire plans, the General Fund would debit Other Financing Sources-Transfers Out and the Pension Trust Fund would credit Transfers In. 
C)  Both of the above. 
D)  Neither of the above.

Question 16

Investment Trust Funds are restricted to:

Accepted Answer

A)  External investment pools. 
B)  Open-end mutual funds. 
C)  Debt securities. 
D)  All the above. 
A)  External investment pools. 
B)  Open-end mutual funds. 
C)  Debt securities. 
D)  All the above.

Question 17

On July 1,2014,the City of Corfu received a gift of debt securities of XYZ Company with a nominal (par)value of $1,600,000. Income is to be used to make awards for civic achievements. As of the date of the gift,the securities had a market value of $1,668,000. Included in this amount is accrued interest of $18,000. The bonds carried an annual interest rate of 6%,payable semiannually on April 1 and October 1. During the fiscal year ended June 30,2015,the following transactions took place:
   Required:
A.Record the above transactions on the books of the City of Corfu Private-Purpose Trust Fund.
B.Prepare a Statement of Changes in Fiduciary Net Position for the City of Corfu Private-Purpose Trust Fund for the year ended June 30,2015.

Accepted Answer

The answer of On July 1,2014,the City of Corfu received...

Question 18

Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund

Accepted Answer

•Investments in a private-purpose trust

Question 19

A fund that exists when the government is the sponsor of a multigovernment investment pool and accounts for the external portion of the trust assets is a(n):

Accepted Answer

A)  Agency fund 
B)  Private-Purpose Trust Fund 
C)  Investment Trust Fund 
D)  Pension Trust Fund 
A)  Agency fund 
B)  Private-Purpose Trust Fund 
C)  Investment Trust Fund 
D)  Pension Trust Fund

Question 20

Assets held in trust that are restricted to benefit the citizenry in general or in support of the reporting government's programs would be reported as private purpose trust funds.

Accepted Answer

A) True 
 B)False

Describe the accounting treatment of Agency Funds,including the purpose,basis of accounting,and required financial statements

Contrast the purpose of Private-purpose Trust Funds and Permanent Funds.

Which type of pension plan is required to pay out a certain sum,generally based on a percentage of salary upon retirement and the number of years of service?

Agency fund assets are offset by liabilities equal in amount,so no fund equity exists.

Escheat property,often collected by the state,is to be reported either in a private-purpose trust fund or in the fund to which the property ultimately reverts.

Internal investment pools,which account for investments of the reporting entity,are to be reported within the funds providing the resources,when preparing financial statements.

The term "fiduciary funds" include agency,pension trust,investment trust,and private purpose trust funds.

Which of the following statements is correct with respect to GASB Statement No.53 which establishes reporting requirements for governments entering into derivative instruments?

In an agency fund,assets are equal to:

A fund that exists when a government is the trustee for a defined benefit pension plan,or a defined contribution pension plan is a(n):

Which of the following is true regarding fiduciary funds?

Which of the following statements about agency funds is true?

Donated resources that benefit individuals or private organizations are reported in a private-purpose trust fund.

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,an agency trust fund has been formed.

Investment Trust Funds are restricted to:

Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund

A fund that exists when the government is the sponsor of a multigovernment investment pool and accounts for the external portion of the trust assets is a(n):

Assets held in trust that are restricted to benefit the citizenry in general or in support of the reporting government's programs would be reported as private purpose trust funds.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

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Exam 7: Fiduciary Funds, Inter-fund Transactions

Describe the accounting treatment of Agency Funds,including the purpose,basis of accounting,and required financial statements

Contrast the purpose of Private-purpose Trust Funds and Permanent Funds.

Which type of pension plan is required to pay out a certain sum,generally based on a percentage of salary upon retirement and the number of years of service?

Agency fund assets are offset by liabilities equal in amount,so no fund equity exists.

Escheat property,often collected by the state,is to be reported either in a private-purpose trust fund or in the fund to which the property ultimately reverts.

Internal investment pools,which account for investments of the reporting entity,are to be reported within the funds providing the resources,when preparing financial statements.

The term "fiduciary funds" include agency,pension trust,investment trust,and private purpose trust funds.

Which of the following statements is correct with respect to GASB Statement No.53 which establishes reporting requirements for governments entering into derivative instruments?

In an agency fund,assets are equal to:

A fund that exists when a government is the trustee for a defined benefit pension plan,or a defined contribution pension plan is a(n):

Which of the following is true regarding fiduciary funds?

Which of the following statements about agency funds is true?

Donated resources that benefit individuals or private organizations are reported in a private-purpose trust fund.

When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,an agency trust fund has been formed.

Investment Trust Funds are restricted to:

Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund

A fund that exists when the government is the sponsor of a multigovernment investment pool and accounts for the external portion of the trust assets is a(n):

Assets held in trust that are restricted to benefit the citizenry in general or in support of the reporting government's programs would be reported as private purpose trust funds.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

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