Question 1

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

Accepted Answer

The answer of Which of the following is the appropriate...

Question 2

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)

Accepted Answer

A permanent fund is established for the purpose of earning income that is to be used for the benefit of the government or its citizens. In this case, the $100,000 is being held permanently and the earnings will be used for maintenance of the city golf course, making it a fitting example of a permanent fund. The other options (agency fund, private-purpose trust fund, investment trust fund) are not appropriate because they do not fit the requirements of the donation in this scenario.

Question 3

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

Accepted Answer

Employer contributions to a PERS should be reported as an addition to net position of the PERS because they represent resources that increase the PERS's net position. The employer contributions do not represent an expense of the General Fund because they are not incurred to pay for specific goods or services. Additionally, they do not represent a revenue of the PERS because they are not earned from exchange transactions. Finally, they are not another financing use of a proprietary fund because the PERS is not a proprietary fund.

Question 4

Kirby County established a tax agency fund to collect property taxes for the City of Kix,the City of Denton,and Kirby County School District.Total tax levies of the three governmental units were $200,000 for the year,of which $60,000 was for the City of Kix,$40,000 for Denton,and $100,000 for the School District.The tax agency fund charges a 2% collection fee that it transfers to the general fund of the County in order to cover costs incurred for agency fund operations.During the year the tax agency fund collected and remitted $150,000 of the $200,000 levies to the various governmental units.Collection fees associated with the $150,000 were remitted to Kirby County's general fund prior to year end.
Required
Prepare the journal entries to record tax collections and remittances for the Kirby County Tax Agency Fund.

Accepted Answer

The answer of Kirby County established a tax agency fund...

Question 5

Explain the difference between an internal cash and investment pool and an external cash and investment pool and describe some of the differences in accounting treatment between the two.

Accepted Answer

The answer of Explain the difference between an internal cash...

Question 6

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.

Accepted Answer

The answer of Ingham County collects,in addition to its own...

Question 7

In financial reporting for proprietary funds and at the government-wide level,the employer's pension expense for the period is equal to:

Accepted Answer

Annual pension cost is the total pension cost for the period, including service cost, interest cost, and any gains or losses. This is the amount that represents the employer's pension expense for the period for reporting purposes. The employer's contribution may not necessarily be equal to the expense for the period, as it could be higher or lower depending on various factors. The annual required contribution is the amount that the actuary determines the employer should contribute to the plan in order to fully fund the benefits. The change in net pension obligation is a measure of the change in the pension liability over the course of the period and does not represent the employer's pension expense for the period.

Question 8

Which of the following is the appropriate measurement focus for agency funds?

Accepted Answer

The answer of Which of the following is the appropriate...

Question 9

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

Accepted Answer

Fiduciary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting, similar to enterprise funds.

Question 10

If a city has a fiduciary responsibility for assets entrusted to it,describe the factors that the city would consider in deciding whether to account for the assets in an agency fund or a trust fund.

Accepted Answer

The answer of If a city has a fiduciary responsibility...

Question 11

Which of the following activities would be accounted for by a trust fund?

Accepted Answer

The answer of Which of the following activities would be...

Question 12

Explain the purpose of an investment trust fund and describe its accounting treatment.

Accepted Answer

The answer of Explain the purpose of an investment trust...

Question 13

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

Accepted Answer

The answer of A statement of cash flows should be...

Question 14

Explain the purpose of the account "undistributed change in fair value of investments" used in a cash and investment pool and describe how it should be reported in the government's financial statements.

Accepted Answer

The answer of Explain the purpose of the account "undistributed...

Question 15

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.

Accepted Answer

The answer of On January 1,Forrester County is holding investments...

Question 16

The financial position of the Policemen's Pension Fund administered by a city should be reported in the city's basic financial statements as a column in the

Accepted Answer

The Policemen's Pension Fund is a fiduciary fund, which is required to be reported separately in the financial statements. The Statement of Fiduciary Net Position reports the financial position of all fiduciary funds administered by the city, including the Policemen's Pension Fund. Therefore, Option B is the best choice for reporting the financial position of the Policemen's Pension Fund.

Question 17

In which of the following circumstances would it be inappropriate to report the assets in the fiduciary fund financial statements?

Accepted Answer

Assets held for other funds of the same government should be reported in the governmental fund financial statements rather than the fiduciary fund financial statements. The fiduciary fund is used to account for assets held by the government in a trustee or fiduciary capacity for the benefit of others. The other options (A, C, and D) involve assets held for the benefit of individuals or other entities outside of the government and would typically be reported in the fiduciary fund financial statements.

Question 18

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

Accepted Answer

A permanent fund is used to account for resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that benefit the government or its citizens.

Question 19

Which of the following statements is true regarding termination benefits?

Accepted Answer

Voluntary termination benefits are provided as an incentive to encourage an employee to voluntarily terminate their employment. This can include a one-time payout or other benefits. These benefits are voluntary because the employee chooses to accept them and leave the company.

Question 20

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

Accepted Answer

OPEB is reported in a manner similar to pension plans, including recognizing liabilities and expenses on the financial statements.

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