ACC 410 WK 8 Quiz 6 Ch. 10 & 11 - All Possible Questions
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ACC 410 WK 8 Quiz 6 Ch. 10 & 11 - All Possible Questions
TRUE/FALSE
1. Per GASB Statement No. 34, permanent funds are classified as fiduciary funds.
2. In accounting for permanent funds only the income can be spent; the principal must be preserved intact.
3. Fiduciary funds focus on current financial resources and use a full accrual basis of accounting.
4. Fiduciary funds are excluded from the government-wide statements.
5. The concept of major versus nonmajor funds does not apply to fiduciary funds, as it does to governmental and proprietary funds.
6. Accounting for the employer’s contribution in a defined contribution plan is straight forward, because the employer is obligated only to make annual contributions in the amount specified in the plan terms.
7. Accounting for the employer’s contribution in a defined benefit plan is straight forward, because the employer is obligated only to make annual contributions in the amount specified in the plan terms.
8. Most public pension plans are defined benefit plans.
9. An employer may have a liability to a defined benefit plan other than for its annual required contributions, depending on the future financial health of the plan.
10. In an agency fund, assets always equals fund balance because there are no liabilities.
MULTIPLE CHOICE
1. A governmental entity receives a gift of cash and investments with a fair value of $200,000. The donor specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested. The $200,000 gift should be accounted for in which of the following funds?
a) Investment trust fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund.
2. In previous years, Center City had received a $400,000 gift of cash and investments. The donor had specified that the earnings from the gift must be used to beautify city-owned parks and the principal must be re-invested. During the current year, the earnings from this gift were $24,000. The earnings from this gift should generally be considered revenue to which of the following funds?
a) Special revenue fund.
b) Private-purpose trust fund.
c) Agency fund.
d) Permanent fund.
3. Which of the following activities of a governmental entity should be accounted for in a fiduciary fund?
a) Funds received from the federal government to support public transportation activities.
b) Funds received from an individual who specified that the principal must be kept intact but the income can be used to support families of police officers killed in the line of duty.
