Deck 19: Governmental Entities: Proprietary Funds, Fiduciary Funds, and Comprehensive Annual Financial Report

Question 1

Because a governmental entity is the custodian for a private-purpose trust fund, the accounting for such a trust fund must comply with the trust indenture under which the trust fund was established.

Answer 1

True

Question 2

A net income caption is included in a statement of revenues, expenses, and changes in net assets of a governmental entity's enterprise fund.

Answer 2

False

Question 3

Only an enterprise fund of a governmental entity issues a statement of cash flows.

Answer 3

False

Question 4

Pension trust funds of governmental entities are accounted for in essentially the same way as proprietary funds.

Question 5

The capital stock of a governmental entity enterprise fund typically is issued to the entity's general fund.

Question 6

Both types of proprietary funds (enterprise funds and internal service funds) issue revenue bonds to finance plant assets.

Question 7

A statement of changes in fiduciary assets is issued for an agency fund of a governmental entity.

Question 8

For the receipt of interest and dividends on investments of a governmental entity's nonexpendable private-purpose trust, journal entries must be prepared for both the endowment principal nonexpendable trust fund and the endowment revenues expendable trust fund.

Question 9

Refunds of employee contributions are debited to the Net Assets Held in Trust for Benefits ledger account of a governmental entity's pension trust fund.

Question 10

If a governmental entity has more than one of a specific fund type, the entity's comprehensive annual financial report includes a combining statement for that fund type.

Question 11

The comprehensive annual financial report for a governmental entity includes a statistical section.

Question 12

Four categories of cash flows are included in the statement of cash flows for a governmental entity's enterprise fund.

Question 13

The statement of cash flows for a governmental entity's internal service fund displays transfers from other funds with cash flows from operating activities.

Question 14

Plant assets acquired by a governmental entity's general fund for use by an agency of the governmental entity that was established to provide goods or services to other agencies of the governmental entity are accounted for in:

A) The general fund
B) A voluntarily maintained general capital assets account group
C) A capital projects fund
D) An internal service fund

Question 15

Might the following ledger accounts be included in the balance sheet of an enterprise fund?

A)
B)
C)
D)

Question 16

Recreational facilities operated by a governmental entity and financed solely by user charges are accounted for in:

A) The general fund
B) A private-purpose trust fund
C) An enterprise fund
D) A capital projects fund
E) A special revenue fund

Question 17

If a governmental entity established a data processing center to service all agencies of the entity, the data processing center is accounted for in:

A) A capital projects fund
B) An internal service fund
C) An agency fund
D) A private-purpose trust fund
E) An enterprise fund

Question 18

Restricted assets are most likely displayed in the balance sheet of a governmental entity:

A) General fund
B) Debt service fund
C) Enterprise fund
D) Voluntarily maintained general long-term debt account group

Question 19

Accounting for nonexpendable private-purpose trust funds of governmental entities resembles accounting for:

A) Proprietary funds
B) Expendable trust funds
C) Governmental funds
D) General long-term debt account group

Question 20

Plant assets of an enterprise fund are accounted for in:

A) A voluntarily maintained general capital asset account group, but no depreciation is recognized on the plant assets
B) A voluntarily maintained general capital asset account group, and depreciation is recognized on the plant assets
C) An enterprise fund, but no depreciation is recognized on the plant assets
D) An enterprise fund, and depreciation is recognized on the plant assets

Question 21

Does the comprehensive annual financial report (CAFR) of a governmental entity include a combined statement of revenues, expenses, and changes in net assets for:

A)
B)
C)
D)

Question 22

Amounts withheld for FICA and income taxes from earnings of employees of a governmental entity are displayed as a liability in a(n):

A) Agency fund
B) General fund
C) Special revenue fund
D) Trust fund

Question 23

A governmental entity's voluntarily maintained general capital assets account group includes plant assets used by all except the entity's:

A) Special revenue fund
B) General fund
C) Pension trust fund
D) Agency fund

Question 24

Are customers' security deposits that may not be expended for operations displayed in the balance sheet of the enterprise fund of a governmental entity as:

A)
B)
C)
D)

Question 25

In the statement of cash flows of a governmental entity's enterprise fund, an operating grant from another governmental entity is displayed with cash flows from:

A) Operating activities
B) Noncapital financing activities
C) Capital and related financing activities
D) Investing activities

Question 26

Selected ledger account balances of the Village of Esprit Enterprise Fund on June 30, 2006, were as follows:
a. Prepare the restricted assets and the liabilities payable from restricted assets sections of the June 30, 2006, balance sheet of the Village of Esprit Enterprise Fund.
b. Prepare a working paper to compute the required balance on June 30, 2006, of the Net Assets Restricted for Revenue Bonds Retirement ledger account of the Village of Esprit Enterprise Fund.

Question 27

The adjusted trial balance of the Town of Origno Internal Service Fund on June 30, 2006, was as follows:
Prepare a statement of revenues, expenses, and changes in net assets and a statement of net assets for the Town of Origno Internal Service Fund for the fiscal year ended June 30, 2006.

Question 28

Indicate for each of the items listed below, by an X in the appropriate column, the classification of the item in a statement of cash flows (direct method) for a governmental entity's enterprise fund:

Question 29

Given the existence of a trust indenture for all private-purpose trusts for which a governmental entity is trustee, and state laws governing trusts, is it necessary that a governmental entity establish two accounting units- nonexpendable private-purpose trust fund and an expendable trust fund-for private-purpose trusts whose principal is to be maintained intact? Explain.