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.