Chapter 17 Flashcards
Which of the following could be reported as a major fund in the fiduciary fund financial statements?
A. Pension (and other employee benefit) trust funds
B. Custodial funds
C. Investment trust funds
D. Private-purpose trust funds
E. None of the above
Only governmental funds and enterprise funds can be classified as major funds. The concept of major fund reporting does not apply to fiduciary funds. [Correct response = E]
Which of the following columns is reported in the fiduciary fund financial statements?
A. The total for all private-purpose trust funds
B. The total for all fiduciary funds
C. Both A and B
D. None of the above
Fiduciary fund financial statements report a single column for each trust fund type, containing the totals for that fund type. The reason a total column is presented in governmental and proprietary fund financial statements is to link the data they report to corresponding data in the government-wide financial statements. Since fiduciary fund data are not incorporated into the government-wide financial statements, no such linkage is possible; therefore, fiduciary funds do not report a total column. [Correct response = A]
How should fiduciary component units be reported?
A. In the government-wide financial statements
B. In the same manner as the government’s own fiduciary funds
C. In one or more separate columns in the fiduciary fund financial statements
D. Either B or C depending on whether the component unit is blended or discretely presented
Component units that are fiduciary in nature are not reported in a separate column in the government-wide financial statements; neither are they reported in one or more separate component units column(s) in the fiduciary fund financial statements. Instead, each fiduciary component unit is reported in the appropriate fiduciary fund column, just like the government’s own fiduciary funds. [Correct response = B]
How many categories of fiduciary net position are reported for trust funds?
A. One
B. Two
C. Three
D. Four
Both the government-wide and proprietary fund statements of net position report three separate categories of net position. In contrast, the net position of a trust fund is reported in a single category that reflects its fiduciary status. [Correct response = A]
How are decreases in fiduciary funds properly described in the statement of changes in fiduciary net position?
A. Expenses
B. Expenditures
C. Deductions
D. Disbursements
Technically speaking, not all decreases in fiduciary net position qualify as expenses. Accordingly, authoritative accounting standards prescribe the use of the term deductions. [Correct response = C]
A government is the sponsor of an investment pool with two other local governments. How should the external portion of the investment pool be reported in the fiduciary fund financial statements of the sponsor government?
A. Investment trust fund
B. Custodial fund
C. None of the above
D. Either A or B
The external portion of the investment pool can be reported as an investment trust fund if the pool meets the criteria of an investment trust. If the pool is not held in a trust, then it would be reported as a custodial fund. [Correct response = D]
What two basic financial statements are included for fiduciary funds?
Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position.
List the four fiduciary fund types.
Pension (and other employee benefit) trust funds.
Investment trust funds
Private-purpose trust funds
Custodial funds
How are fiduciary component units reported?
Within one of the four appropriate fund type columns.
True or False - Fiduciary statements of net position should report their assets and liabilities in order of liquidity.
True
True or False - investment expenses are reported alongside investment income in the additions section of the statement of changes in fiduciary net position.
True
