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Question(s) / Instruction(s):

16.     Wadsworth County maintains an investment pool in which it invests funds both for Wadsworth County and for all legally separate school districts in the county. When it reports assets in the Investment Trust Fund's statement of fiduciary net assets, whose assets should be reported?
          a.     only the assets of the legally separate school districts
          b.     only the assets belonging to Wadsworth County
          c.     both the assets of the separate school districts and the assets belonging to Wadsworth County
          d.     only the assets of the major school districts and the assets belonging to Wadsworth County

 

     17.     The City of Albertville invests the assets of several neighboring cities through its Investment Trust Fund. What account should Albertville credit when it receives money from the neighboring cities for investment purposes?
          a.     Revenues
          b.     Additions - net assets
          c.     Additions - revenues
          d.     Additions - net increase in fair value of investments

 

     
     18.     Liberty County maintains an investment pool on behalf of certain cities within the county. When it prepares its statement of fiduciary net assets at year-end, how should Liberty value the corporate securities that it holds on behalf of the cities?
          a.     at the amount of cash originally sent by the cities for investment
          b.     at the amount paid by the county to acquire the securities
          c.     at the fair value (at year-end) of the securities held on behalf of the cities
          d.     at the average value of the securities held during the year on behalf of the cities

 

     19.     In the statement of fiduciary net assets prepared for an Investment Trust Fund, how should the equity of the participants in the investment pool be characterized?
          a.     as fund balance
          b.     as retained earnings
          c.     as the excess of additions over deductions
          d.     as net assets held in trust

 

     20.     Securities held by an Investment Trust Fund and carried on the books at $100,000 are soldfor $110,000. On receiving the cash from the sale, how should the Investment Trust Fund account for the $10,000 gain?
          a.     as a direct credit to net assets of the Fund participants
          b.     as a liability - due to Fund participants
          c.     as an addition - net increase in fair value of investments
          d.     as a gain - equity in investment pool

 

     21.     What is the distinction between Private Purpose Trust Funds and Permanent Funds?
          a.     Private Purpose Trust Funds account on the modified accrual basis; Permanent Funds account on the full accrual basis
          b.     The beneficiaries of Private Purpose Trust Funds are "outside" the government; the beneficiaries of Permanent Funds are the reporting government or its citizenry
          c.     Private Purpose Trust Funds are governmental fund types; Permanent Funds are fiduciary fund types
          d.     Investments of Private Purpose Trust Funds are valued at cost; investments of Permanent Funds are valued at fair value

 

 


     

     22.     Which of the following resources should be accounted for in a Private Purpose Trust Fund?
          a.     a gift received from a donor who stipulates in a formal trust agreement that the principal must be kept intact and the income must be used to beautify the state's parks
          b.     admissions fees that are legally required, based on state laws, to pay the debt service on the state's new museum and cultural center
          c.     dormant bank accounts that escheat to the state, with state laws requiring that the resources be held in perpetuity for the rightful owners
          d.     fees received by a state from insurance companies, representing charges for overseeing insurance companies located within the state

     23.     Assume a pension plan's actuarially-computed liabilities are greater than the actuarial value of the assets. How does this difference between assets and liabilities affect the actuarially determined contribution to the pension plan required for the following year?
          a.     It does not enter into the actuary's calculation if the actuarial value of plan assets exceeds their aggregate cost
          b.     It is not considered in establishing the required contribution, but it is disclosed in the schedule of funding progress
          c.     The entire amount of the unfunded actuarially accrued liability is included in the next year's required contribution to show "good faith" to retirees
          d.     A portion of the unfunded actuarial accrued liability is included in the next year's contribution by means of an amortization process

 

     24.     Which of the following resources should be accounted for in a Private Purpose Trust Fund?
          a.     sales taxes received by a state and held pending distribution to the local governments on whose behalf they were collected
          b.     a gift received from a donor who stipulates in a trust agreement that the principal must be kept intact and the income used for benefits to spouses of deceased uniformed officers
          c.     a grant received from a higher level government that stipulates that the grant can be used for no purpose other than to construct highways
          d.     employee contributions to a health care plan that will be used, together with government contributions, to pay employee health care benefits

 

 

     

     25.     A fund classified as a Permanent Fund receives income from its investments. The trust agreement stipulates that this income must be used to help finance the regular monthly concerts given in the municipal library. What kind of fund should be used to account for the concert expenditures?
          a.     Private Purpose Trust Fund
          b.     Agency Fund
          c.     General Fund
          d.     Special Revenue Fund

 

     26.     Which of the following activities of a state should be accounted for in an Agency Fund?
          a.     a lottery, wherein half the revenues is used for prizes and the other half is used for lottery operating expenses and to enhance revenues available for education purposes
          b.     sales taxes collected on behalf of counties that elect to "piggy-back" their own sales tax onto the state sales tax, with the county portion to be remitted later to the counties
          c.     contributions from the state and from local governments that will be invested and paid out to state and local government employees in the form of pension benefits
          d.     highway taxes that will be used to finance improvements made to roads within the state


     
     27.     Which financial statements are prepared for an Agency Fund?
          a.     only a statement of fiduciary net assets
          b.     only a statement of changes in fiduciary net assets
          c.     a statement of fiduciary net assets and a statement of changes in fiduciary net assets
          d.     a statement of fiduciary net assets, a statement of changes in fiduciary net assets, and a cash flow statement

 

     28.     Which of the following best summarizes the accounting equation for Agency Funds?
          a.     assets - liabilities = equity
          b.     assets = liabilities + equity
          c.     assets = liabilities + opening equity + (revenues - expenditures)
          d.     assets = liabilities

 

 


     

The following information pertains to questions 29 and 30
Bevo County levies a property tax of $10 million. Of this amount, $6 million pertains tothe activities of Bevo County's General Fund, while the other $4 million pertains to and will be remitted to the 10 villages within the County. The County anticipates that it will collect the entire $10 million that has been levied.

     29.     How much revenue should Bevo County recognize in its Agency Fund?
          a.     $0
          b.     $4 million
          c.     $6 million
          d.     $10 million

 

     30.     If Bevo County prepares an Agency Fund statement of fiduciary net assets before it collects the property taxes, how much should it report as property taxes receivable?
          a.     $0
          b.     $4 million
          c.     $6 million
          d.     $10 million

 

     31.     Empire State collects personal income taxes both for its own activities and for cities in the state that have elected to "piggy-back" their own income taxes on top of the state taxes. As a fiduciary, the state temporarily invests all tax receipts pending determination of amounts to remit to the cities. The total investment income received by the state is $300,000, of which $100,000 will be sent to the cities. How much of the investment income should be recognized as revenue in the state's Agency Fund?
          a.     $0
          b.     $100,000
          c.     $200,000
          d.     $300,000

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