ACG4501 Chapter 08 Quiz Flashcards
Equity in a fiduciary fund is referred to as
A) Net position
B) Fund balance
C) Retained earnings
D) None of the above
A) Net position
The principal of a Private-Purpose Trust Fund
A) Must never fall below a pre-determined threshold that is determined by generally accepted accounting principles
B) Must be spendable in nature
C) May be spendable or nonspendable in nature
D) Must be nonspendable in nature
C) May be spendable or nonspendable in nature
The General Fund’s share of its contribution to a Pension Trust Fund on behalf of the its employees would be reported by the General Fund as
A) A transfer out
B) Another financing source
C) An expenditure
D) None of the above
C) An expenditure
The local school board received a bequest of $1,000,000 to establish a scholarship fund for graduating students. The scholarship is accounted for in a Private-Purpose Trust Fund. The fund would report
A) Additions of $1,000,000
B) Revenues of $1,000,000
C) A transfer of $1,000,000
D) Accounts payable of $1,000,000
A) Additions of $1,000,000
A Scholarship Private-Purpose Trust Fund of a local school board pays tuition of $10,000. What journal entry would be made to record this transaction?
A) Debit Tuition Expenses $10,000
Credit Cash $10,000
B) Debit Transfers to Other Governmental Units $10,000
Credit Cash $10,000
C) Debit Deductions - Tuition $10,000
Credit Cash $10,000
D) Debit Trust Revenue $10,000
Credit Cash $10,000
E) Debit Deferred Revenue $10,000
Credit Cash $10,000
C) Debit Deductions - Tuition $10,000
Credit Cash $10,000
If an Enterprise Fund transfers employer contributions to the Pension Trust Fund, which of the following best describes the effect of the transaction on each fund?
A) The Enterprise Fund will report transfers out and the Pension Trust Fund will report transfers in
B) The Enterprise Fund will report expenses and the Pension Trust Fund will report additions
C) The Enterprise Fund will report deductions and the Pension Trust Fund will report additions
D) The Enterprise Fund will report expenses and the Pension Trust Fund will report revenues
E) The Enterprise Fund will report expenditures and the Pension Trust Fund will report revenues
B) The Enterprise Fund will report expenses and the Pension Trust Fund will report additions
A government receives a bequest of $300,000 to establish an endowment fund whose income is to be used to support scholarships for local high school students. The school district is not part of the government. The government should report this activity in which type of fund?
A) Private-purpose Trust Fund
B) Investment Trust Fund
C) Permanent Fund
D) Agency Fund
A) Private-purpose Trust Fund
Which financial statements are required for a private purpose trust fund?
A) Statement of net position, statement of revenues, expenses, and changes in retained earnings, and statement of cash flows
B) Statement of Fiduciary net position and Statement of revenues, expenses and changes in net position
C) Statement of fiduciary net position, statement of changes in fiduciary net position, and statement of cash flows
D) Statement of Fiduciary Net position and statement of changes in fiduciary net position
D) Statement of Fiduciary Net position and statement of changes in fiduciary net position
In a Tax Agency Fund, revenues must be recognized
A) When measurable and available
B) On the cash basis
C) At net realizable value of the taxes receivable
D) None of the above. Revenues are not reported for Agency Funds
D) None of the above. Revenues are not reported for Agency Funds
Generally accepted accounting principles require the use of an Investment Trust Fund
A) For governments that sponsor external investment pools
B) For governments that have any investment activity
C) For governments that pool their cash for investment purposes
D) For governments that are investing in investments that carry high risk
A) For governments that sponsor external investment pools
