Question 1

Which is true regarding the basis of accounting for fiduciary funds?

Accepted Answer

All four fiduciary funds use the economic resources measurement focus and accrual basis of accounting the same as proprietary funds. Governmental funds use the modified accrual basis of accounting and the current financial resources measurement focus. Fiduciary fund required statements are the Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. Agency funds are not included in the Statement of Changes in Net Position because they have no revenues additions) or expenses deductions).

Question 2

The terms used for classification of items on the Statement of Changes in Fiduciary Net Position are:

Accepted Answer

On the Statement of Changes in Fiduciary Net Position, the terms additions and deductions are used rather than revenues and expenses.

Question 3

Which of the following is true regarding the financial statements of fiduciary funds?

Accepted Answer

The financial statements for fiduciary funds are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. Agency funds are not included in the Statement of Changes in Net Position because they have no revenues additions or expenses deductions.
Fiduciary funds use the economic resources measurement focus and accrual basis of accounting.

Question 4

Which of the following is true regarding fiduciary funds?

Accepted Answer

Fiduciary funds are not included in the government-wide statements because governments merely have custody, not ownership, of fiduciary resources. Fiduciary funds include agency, pension and other employee benefit trust, private-purpose trust, and investment trust funds.

Question 5

In an agency fund, assets are equal to:

Accepted Answer

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

Question 6

A fund that is used to account for assets held by a government temporarily acting as agent for one or more other governments units or for individuals or private organizations is an:

Accepted Answer

An Agency fund accounts for assets held by a government temporarily as agent for individuals, organizations, or other governmental units. Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent.

Question 7

______ funds are created when individuals or organizations contribute resources with the agreement that principal and/or income will be used to benefit individuals or private organizations.

Accepted Answer

Private-purpose trust funds account for trust agreements where principal and/or income benefit individuals, private organizations, or other governments.

Question 8

Which of the following statements is not true regarding agency funds?

Accepted Answer

Agency funds use the economic resources measurement focus and accrual basis of accounting. Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent. Agency fund assets are offset by liabilities in equal amount; no fund equity exists. Agency fund assets and liabilities are to be recorded at the time the government become responsible for the assets.

Question 9

How are Fiduciary Funds presented in the Government-wide Financial Statements?

Accepted Answer

Fiduciary funds are not included in the government-wide statements because governments merely have custody, not ownership of fiduciary resources.

Question 10

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 an:

Accepted Answer

The government that manages the multi-government investment pool should report the external portion in an investment trust fund.

Question 11

______ funds are created when individuals or organizations contribute resources with the agreement that the income will be used to the citizenry or the government's programs.

Accepted Answer

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. Agency funds are used to account for situations in which the government is acting as a collecting/disbursing agent. Investment trust funds account for the external portion of investment pools reported by the sponsoring government.

Question 12

Which of the following is true regarding agency funds?

Accepted Answer

Agency funds report assets and liabilities, but not net position, revenues or expenses. Agency funds are used to account for property tax collections by one government for another.

Question 13

Which of the following is true regarding fiduciary funds?

Accepted Answer

Fiduciary funds include agency, pension and other employee benefit) trust, private-purpose trust, and investment trust funds. Permanent funds are governmental funds.

Question 14

Which type of pension plan most commonly results in an unfunded actuarial liability?

Accepted Answer

A defined benefit plan is one in which the plan is required to pay out a certain level of benefit based on a formula. The benefit is paid out regardless of the amount available in the plan. It is possible for the fund to have unfunded liabilities. A defined contribution plan provides an individual retirement account for each participating employee and no obligation exists for pension benefits beyond what has been accumulated in each individual's account.

Question 15

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

Accepted Answer

A pension trust fund exists when a government is the trustee for a defined benefit pension plan, or a defined contribution pension plan

Question 16

A fund that is the result of an agreement between a contributor and a government that the principal and/or income of trust assets is for the benefit of individuals, organizations, or other governments is an:

Accepted Answer

A Private-Purpose Trust Fund is a fund that is the result of an agreement between a contributor and a government that the principal and/or income of trust assets is for the benefit of individuals, organizations, or other governments.

Question 17

Which of the following statements is not correct with respect to Agency Funds?

Accepted Answer

Agency funds use the economic resources measurement focus and accrual basis of accounting. Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent. Agency fund assets are offset by liabilities in equal amount; no fund equity exists. Agency fund assets and liabilities are to be recorded at the time the government become responsible for the assets.

Question 18

Which of the following is true regarding fiduciary funds?

Accepted Answer

Fiduciary funds are included in the fund basis statements but are not included in the government-wide statements because governments merely have custody, not ownership of fiduciary resources. Fiduciary funds are reported by fund type.

Question 19

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 20

Which of the following is not an example of the function of an Agency Fund?

Accepted Answer

Payment of pension benefits to retired government employees would be a function of a pension trust fund.

Quiz 7: Fiduciary Funds, Interfund Transactions

Which is true regarding the basis of accounting for fiduciary funds?

The terms used for classification of items on the Statement of Changes in Fiduciary Net Position are:

Which of the following is true regarding the financial statements of fiduciary funds?

Which of the following is true regarding fiduciary funds?

In an agency fund, assets are equal to:

A fund that is used to account for assets held by a government temporarily acting as agent for one or more other governments units or for individuals or private organizations is an:

______ funds are created when individuals or organizations contribute resources with the agreement that principal and/or income will be used to benefit individuals or private organizations.

Which of the following statements is not true regarding agency funds?

How are Fiduciary Funds presented in the Government-wide Financial Statements?

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 an:

______ funds are created when individuals or organizations contribute resources with the agreement that the income will be used to the citizenry or the government's programs.

Which of the following is true regarding agency funds?

Which of the following is true regarding fiduciary funds?

Which type of pension plan most commonly results in an unfunded actuarial liability?

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

A fund that is the result of an agreement between a contributor and a government that the principal and/or income of trust assets is for the benefit of individuals, organizations, or other governments is an:

Which of the following statements is not correct with respect to Agency Funds?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding fiduciary funds?

Which of the following is not an example of the function of an Agency Fund?