Question 1

A statewide pension plan exists for all local governments in a certain state.The provisions of the plan indicate that each qualifying retiree receive 2% multiplied by the number of years active employment multiplied by the average salary for the past four years of service.The government calculates the actuarial liability on a statewide basis,not by individual government.The plan would be known as a:

Accepted Answer

The plan is a multiple-employer plan because it covers all local governments in a certain state. It is also a defined benefit plan because the benefit formula is specified in the plan. However, it is a cost-sharing plan because the actuarial liability is calculated on a statewide basis, not by individual government. Choice (A) is incorrect because there is no mention of an agency plan. Choice (B) is incorrect because the plan is a defined benefit plan, not a defined contribution plan. Choice (D) is incorrect because the plan covers multiple employers, not just one.

Question 2

Which of the following is true regarding fiduciary funds?

Accepted Answer

- When a government is trustee for a defined benefit pension plan, two RSI schedules are required: a Schedule of Funding Progress and a Schedule of Employer Contributions. (True statement)
- Escheat property proceeds must be reported in either a private-purpose trust fund or the fund to which the property ultimately escheats. (True statement)

Question 3

Where in the Comprehensive Annual Financial Report would one find the accrued actuarial pension liability,in cases where the government has made the required annual contributions?

Accepted Answer

The accrued actuarial pension liability, in cases where the government has made the required annual contributions, would be found in the Required Supplementary Information Schedule of Funding Progress. This schedule provides information on the funding status of the pension plan, including the actuarial accrued liability, the funded status, and the ratio of assets to liabilities. The Statement of Fiduciary Net Assets provides information on the assets, liabilities, and net assets of the pension plan, but may not specifically include the accrual of the pension liability.

Question 4

The City of Sycamore has investments in bonds.These bonds have an amortized cost of $1,996,000 and a market value of $2,002,000.The market value is quoted and available in the financial press.The original cost of the bonds was $1,992,000.The par value at maturity will be $2,000,000.The amount at which the investments would be reported is:

Accepted Answer

Investments in bonds are reported at fair value, which is the market value of $2,002,000.

Question 5

Which of the following is true regarding fiduciary funds?

Accepted Answer

The answer of Which of the following is true regarding...

Question 6

Which of the following is true regarding fiduciary funds?

Accepted Answer

Fiduciary funds are separately reported in the government-wide financial statements but are excluded from the fund financial statements. Fiduciary funds consist of agency, pension (and other employee benefits) trust, private-purpose trust, and investment trust funds.

Question 7

James McHughes gave the following to the City of Carnesville in order to establish a private-purpose trust:
Land - cost,$500,000; fair market value as of the date of the gift,$400,000.
Securities - cost,$1,600,000; fair market value as of the date of the gift,$1,800,000.
The amount to be recorded as additions for gifts by the private-purpose trust fund would be:

Accepted Answer

The amount to be recorded as additions for gifts by the private-purpose trust fund would be the fair market value of the donated assets, which is $400,000 + $1,800,000 = $2,200,000. Therefore, the correct answer is choice C.

Question 8

Which of the following is true regarding pension accounting and reporting for state and local governments?

Accepted Answer

The answer of Which of the following is true regarding...

Question 9

Which of the following is true regarding pension (and other employee benefit)trust funds?

Accepted Answer

The answer of Which of the following is true regarding...

Question 10

Which of the following is not true regarding postemployment benefit plans other than pension plans?

Accepted Answer

GASB Statement No. 43 does not require these plans to be fully funded. Instead, it requires disclosure of the funding status, actuarial assumptions, and other information related to these plans. Option A, C, and D are true statements.

Question 11

The City of Springfield has three pension plans: a locally administered police plan for which it is trustee,a statewide cost sharing plan,and a statewide agency plan.The City would include in its CAFR financial statements for:

Accepted Answer

The City of Springfield would include in its CAFR financial statements only the locally administered police plan for which it is the trustee. The statewide plans are not administered by the city and therefore are not included in its financial statements.

Question 12

Clinton County maintains an investment trust fund for the investments of governments within its borders.All the investments had determinable fair values.Which of the following is true regarding investment trust funds and investments in general?

Accepted Answer

As per the standard accounting practices, investment trust funds report the investments of the other governments at fair value. Therefore, option A is true while B is false. Neither of the options C or D is true as per the discussion above.

Question 13

Which of the following is true regarding fiduciary funds?

Accepted Answer

Fiduciary funds are not included in the government-wide statements, but are reported by fund type in the fund statements. They are not considered to be major funds.

Question 14

Which of the following is true regarding accounting for investments by state and local governmental units?

Accepted Answer

The answer of Which of the following is true regarding...

Question 15

GASB Statement 31,Accounting and Financial Reporting for Certain Investments and for External Investment Pools,does not apply to which of the following investment types?

Accepted Answer

The answer of GASB Statement 31,Accounting and Financial Reporting for...

Question 16

The tax agency fund of Eden County collected $2,000,000 for the Eden School District,$1,000,000 for the Village of Edenton,$1,200,000 for the Eden Park District,and $700,000 for Eden County.County General Fund employees handle the collections,and a 3 percent collection fee is charged all units except the county.The amount to be remitted to the county General Fund would be:

Accepted Answer

The collection fee is 3% of $2,000,000 + $1,000,000 + $1,200,000 = $4,200,000 x 3% = $126,000. The amount to be remitted to the county General Fund would be $4,200,000 - $126,000 = $4,074,000.

Question 17

The tax agency fund of Orange County collected $7,000,000 for a school district,$3,000,000 for the county General Fund,and $5,000,000 for a municipality.County General Fund employees handle the collections,and a 2.5 percent collection fee is charged all units except the county.The total amount of revenue recognized by the county General Fund would be:

Accepted Answer

The answer of The tax agency fund of Orange County...

Question 18

Which of the following is true regarding fiduciary funds?

Accepted Answer

Private purpose trust fund results when a contributor and a government agree that the principal and/or income of trust assets is for the benefit of individuals, organizations, or other governments. Internal investment pools are not separate funds and the resources continue to be reported by the funds providing the resources.

Question 19

Churchville County is trustee for a multi-government investment pool and has established an investment trust fund.Included in the investment trust fund,for management purposes,are investments in the amount of $15 million from the County's General Fund,$3 million from the County's special revenue funds,and $112 million from other governments.Which of the following would be true?

Accepted Answer

The County would report the $112 million in an investment trust fund, the $15 million in its General Fund, and the $3 million in special revenue funds because these are the amounts that have been invested in the investment trust fund for management purposes. Therefore, the total amount in the investment trust fund for reporting purposes would be $130 million, but it would be broken down into these categories. Option A is incorrect because it only includes the County's General Fund investment. Option B is incorrect because it includes all investments, including those from other governments, which are not part of the County's investment trust fund. Option D is incorrect because a permanent fund is a different type of fund and would not be appropriate for reporting purposes in this scenario.

Question 20

Which of the following is true regarding the reporting of investments by state and local governmental units?

Accepted Answer

Both options A and B are true regarding the reporting of investments by state and local governmental units. Investments that have a determinable fair value are required to be reported at fair value, and realized and unrealized gains and losses should be combined in the relevant operating statement.

Quiz 7: Fiduciary Trustfunds

Which of the following is true regarding fiduciary funds?

Where in the Comprehensive Annual Financial Report would one find the accrued actuarial pension liability,in cases where the government has made the required annual contributions?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding pension accounting and reporting for state and local governments?

Which of the following is true regarding pension (and other employee benefit) trust funds?

Which of the following is not true regarding postemployment benefit plans other than pension plans?

The City of Springfield has three pension plans: a locally administered police plan for which it is trustee,a statewide cost sharing plan,and a statewide agency plan.The City would include in its CAFR financial statements for:

Clinton County maintains an investment trust fund for the investments of governments within its borders.All the investments had determinable fair values.Which of the following is true regarding investment trust funds and investments in general?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding accounting for investments by state and local governmental units?

GASB Statement 31,Accounting and Financial Reporting for Certain Investments and for External Investment Pools,does not apply to which of the following investment types?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding the reporting of investments by state and local governmental units?