Question
8 17 Multiple Choice. Choose the best answer . 1. Which of the following financial statements is prepared by fiduciary funds? a . Statement of
8 17 Multiple Choice. Choose the best answer.
1. Which of the following financial statements is prepared by fiduciary funds?
a . Statement of activities.
b . Statement of net position.
. Statement of cash flows.
d . All of the above.
2. At the government-wide level, where are fiduciary funds reported?
a . In the Governmental Activities column.
b . In the Business-type Activities column.
c . As an internal balance in the total column.
d . Fiduciary funds are not reported at the government-wide level.
Items 3 through 5 relate to the following information.
The county collects taxes on behalf of the county, city, and a special pur-
pose district. For 2017, the taxes to be levied by the government are:
County $ 632,000
City 917,000
Special purpose district 26,000
Total $1,575,000
3. What type of fund will the county use to account for tax collection and
distribution?
a. The county must use a trust fund.
b. The county must use an agency fund.
c. The county should use a special revenue fund.
d. Unless mandated by law, the county may use a governmental or propri-
etary fund; however, an agency fund is typically used.
4. On the date the taxes are levied, the county would credit which of the
following accounts in the fund used to account for tax collection and
distribution?
a . Due to Other Funds and Governments.
b. RevenuesTaxes.
c . AdditionsOther Funds and Governments.
d. Accrued Taxes.
5. If the county assessed a 1 percent administrative fee, it would be recorded by
the county as a credit to:
a . Revenue.
b . Transfer In.
c . AdditionsFund Equity.
d . Due to County.
Items 6 through 8 relate to the following information:
The city council of the City of Great Falls decided to pool the investments
of its General Fund with that of Great Falls School District and Great Falls
Township, each of which carried its investments at fair value as of the prior
balance sheet date. All investments are revalued to current fair value at the date
of the creation of the pool. At that date, the prior and current fair value of the
investments of each of the participants were as follows:
Investments
Prior Fair Value Current Fair Value
General Fund $ 600,000 $ 590,000
Great Falls School District 3,600,000 3,640,000
Great Falls Township 1,800,000 1,770,000
Total $6,000,000 $6,000,000
6. At the date of the creation of the investment pool, each of the participants should:
a . Debit its Fund Balance account and credit its Investments account for the
prior fair value of the assets transferred to the pool.
b. Debit or credit its Investments account as needed to adjust its carrying
value to current fair value. The offsetting entry in each fund should be to
Fund Balance.
c. Debit Equity in Pooled Investments for the current fair value of investments
pooled, credit Investments for the prior fair value of investments pooled,
and credit or debit RevenuesChange in Fair Value of Investments for the
difference.
d . Make a memorandum entry only.
7. One day after creation of the pool, the investments that had belonged to
Great Falls Township were sold by the pool for $1,760,000.
a . The loss of $40,000 is borne by each participant in proportion to its equity
in the pool.
b. The loss of $10,000 is borne by each participant in proportion to its equity
in the pool.
c. The loss of $40,000 is considered to be a loss borne by Great Falls Township.
d. The loss of $10,000 is considered to be a loss borne by Great Falls Township.
8. One month after creation of the pool, earnings on pooled investments totaled
$59,900. It was decided to distribute the earnings to the participants, round-
ing the distribution to the nearest dollar. The Great Falls School District
should receive:
a . $36,000.
b . $35,940.
c. $36,339.
d. $37,000.
Items 9 and 10 are based on the following information.
Fairview County contributes to and administers a single-employer defined
benefit pension plan on behalf of its covered employees. The following infor-
mation is available for the current year:
Current year benefits $150,000
Actual amount contributed to the plan 145,000
Amortization of deferred amounts 2,500
Net annual change in amounts normally expected to be
liquidated with expendable available financial resources 600
Interest on prior pension liabilities 1,250
9. If the above information was for the General Fund, the current year pension
expenditure would be equal to:
a . $145,000.
b . $145,600.
c . $150,000.
d . $153,750.
10. If the above information was for a proprietary fund, the current year pension
expense would be equal to:
a . $145,000.
b . $145,600.
c . $150,000.
d . $153,750.
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