Exam 8: Accounting for Fiduciary Activities Agency and Trust Funds

Which of the statements concerning agency funds is true?

On July 1,2011,Kent County received the following securities to be held as the principal of a trust; the income from the securities is to be transferred to the Kent Heritage Museum,a private not-for-profit museum. Required 1)In what type of fiduciary fund should the receipt of the bonds described above be recorded? 2)Show in general journal form the entry that should be made to record the receipt of the bonds. 3)On January 1,2012,interest received in cash amounted to $57,500 ($35,000 on Blue Company bonds and $22,500 on Red Company bonds).Assuming that income from the bonds is to be computed on the accrual basis,what is the amount of income for the period 7/1/11 - 12/31/11 that should be transferred to the Kent County Museum early in 2012? Show computations.

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

Fiduciary funds are accounted for in a manner similar to which of the following funds?

An agency relationship that usually necessitates the creation of an agency fund is the collection of revenues by one government for several of its funds and/or for other governments and their funds.

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.

Ingham County collects,in addition to its own taxes,taxes for other units.Tax levied for 2011 were as follows: Collections from the 2011 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 2011 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 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?

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:

A local civic organization gave the city government $15,000 cash to be used to pay the utility bills of persons whose incomes were below the poverty level.The city should account for the $15,000 gift in

All fiduciary funds report transactions between the fund and both internal and external parties.

An agency fund should be used to account for special assessment billing and collection,and related debt service of special assessment debt,if the government has no responsibility for the debt.

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.

Describe the types of pension plans most often found in governmental entities and the differences between them.Do you expect that most governmental employers sponsor a "single-employer plan" or participate in a public employee retirement system (PERS)?

A statement of cash flows should be prepared for which of the following fiduciary fund types?

If special assessment receivables are recorded in the accounts of an agency fund,the appropriate account(s)to credit is (are):

Which of the following is the appropriate basis of accounting for an agency fund?

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

Fiduciary funds are sometimes identified in the annual reports of state and local governments as "Trust and Agency Funds."

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