Question 1

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

The answer of Clinton County maintains an investment trust fund...

Question 2

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

Accepted Answer

GASB Statement No. 43, Financial Reporting for Postretirement Benefit Plans Other Than Pension Plans, does not require that such plans be fully funded. Most governments operate on a pay-as-you-go basis and the plan net assets are small relative to the benefits promised. Similar to pensions, governments are required to present two financial statements, the Statement of Plan Net Assets and the Statement of Changes in Plan Net Assets, and two schedules must be included as required supplementary information: the Schedule of Funding Progress and the Schedule of Employer Contributions.

Question 3

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 4

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

Accepted Answer

Investments in securities with determinable fair values are reported at fair value, including bonds held to maturity, according to governmental accounting standards.

Question 5

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 is typically reported in the Required Supplementary Information Schedule of Funding Progress, which shows the funded status of the pension plan and includes information on the actuarial valuation of the plan's assets and liabilities. The Statement of Fiduciary Net Assets may include information on the plan's assets and liabilities, but may not specifically show the accrued actuarial pension liability.

Question 6

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 7

The tax agency fund of Fulton County collected $6,000,000 for a school district, $3,000,000 for the county general fund and $4,000,000 for a municipality. County general fund employees handle the collections and a 3 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 Fulton County...

Question 8

Which of the following is true regarding fiduciary funds?

Accepted Answer

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

Question 9

The County of Churchville 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, $2 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 $2 million in special revenue funds. This is because the investment trust fund is used to manage investments on behalf of multiple government entities, while the General Fund and special revenue funds are specific to the County itself. Therefore, each of these funds should be reported separately.

Question 10

Which of the following is true regarding fiduciary funds?

Accepted Answer

A) 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
B) Escheat property proceeds must be reported in either a private-purpose trust fund or the fund to which the property ultimately escheats. Both of these statements are true regarding fiduciary funds.

Question 11

When accounting for other postemployment benefits, the OPEB obligation is:

Accepted Answer

OPEB obligations are reported in the government-wide financial statements and represent the cumulative difference between the amount funded and the annual required contribution.

Question 12

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 answer of The City of Springfield has three pension...

Question 13

James McHughes gave the following to the City of Carnesville in order to establish a private-purpose trust: Land - cost, $250,000; fair market value as of the date of the gift, $200,000.
Securities - cost, $800,000; fair market value as of the date of the gift, $900,000.
The amount to be recorded as additions for gifts by the private-purpose trust fund would be:

Accepted Answer

The additions for gifts by the private-purpose trust fund would be $1,100,000. This includes the fair market value of the land ($200,000) and the fair market value of the securities ($900,000). The cost of the assets is not relevant for gift accounting purposes.

Question 14

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 15

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 2 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 amount collected for the County General Fund is $700,000. However, a 2% collection fee is charged for all units except the county.

Therefore, the total amount collected from the other units is: 
$2,000,000 + $1,000,000 + $1,200,000 = $4,200,000

2% of $4,200,000 is $84,000.

So, the amount to be remitted to the county General Fund is: 
$700,000 + $84,000 = $784,000

Therefore, the correct answer is B) $784,000.

Question 16

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 $1,100,000. This is because the gift of $1,000,000 is increased by the investment income of $100,000.

Question 17

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 (an):

Accepted Answer

The plan covers multiple employers and provides a defined benefit based on years of service and average salary, making it a defined benefit plan. Additionally, the actuarial liability is calculated on a statewide basis, indicating that the cost is shared among employers, making it a cost-sharing plan. Therefore, the plan is a multiple-employer, defined benefit, cost-sharing plan.

Question 18

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

Accepted Answer

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

Question 19

Which of the following is true regarding fiduciary funds?

Accepted Answer

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

Question 20

According to GASB Statement 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, investments of internal investment pools are to be reported in:

Accepted Answer

According to GASB Statement 31, investments of internal investment pools should be reported in the funds that provide the resources for the investments.

Quiz 7: Fiduciary Trust Funds

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 not true regarding postemployment benefit plans other than pension plans?

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

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

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 pension accounting and reporting for state and local governments?

Which of the following is true regarding fiduciary funds?

Which of the following is true regarding fiduciary funds?

When accounting for other postemployment benefits, the OPEB obligation is:

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:

Which of the following is true regarding fiduciary funds?

The amount to be recorded as additions for gifts by the private-purpose trust fund would be:

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

Which of the following is true regarding fiduciary funds?

According to GASB Statement 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, investments of internal investment pools are to be reported in: