Multiple Choice Questions
Identify the best answer for each of the following:
1. Which of the following must be prepared for Agency Funds as part of a government’s Basic Financial Statements?
a. Statement of changes in net position
b. Statement of revenues, expenditures, and changes in fund balances
c. Statement of net position
d. Statement of changes in agency fund assets and liabilities

2. Which of the following items should be accounted for in an Agency Fund when a special assessment project is financed by issuing special assessment debt for which the government is not obligated in any manner?
a. The bond proceeds and construction costs
b. The debt service transactions
c. The long-term debt issued
d. The capital assets constructed or acquired

3. Bonds issued in a situation like that described in question 2 should be reported by the government in
a. An Agency Fund.
b. A Capital Projects Fund.
c. A Debt Service Fund.
d. The General Long-Term Liabilities accounts.

4. Which of the following accounts typically would be used by an Agency Fund?
a. Revenue
b. Notes receivable
c. Bonds payable
d. Cash

5. When a Tax Agency Fund is used, the governmental funds in which the taxes should ultimately be accounted for should report tax revenues
a. When levied.
b. When received by year end or not more than 60 days thereafter.
c. In the year for which the taxes are levied or later.
d. When both b and c are true.

6. Employer governments must measure their annual pension contribution
a. By using a standardized approach.
b. In accordance with certain guidelines, but not in a standardized way.
c. By using the unit credit method.
d. As required by the FASB pension guidance.

7. Which of the following statements is not required to be presented for an Investment Trust Fund?
a. Statement of net position
b. Statement of changes in net position
c. Statement of cash flows
d. All of the above are required.

8. Which of the following statements about a Pension Trust Fund Statement of Plan Net Position is not true?
a. Investments are reported at fair value.
b. Capital assets are reported.
c. The actuarial present value of future benefits payable is reported as a liability, not as an equity component.
d. Net position is almost always positive.

9. Which of the following statements about a Private-Purpose Trust Fund is false?
a. The principal in a Private-Purpose Trust Fund must be nonexpendable in nature.
b. The principal in a Private-Purpose Trust Fund may be either expendable or nonexpendable in nature.
c. Private-Purpose Trust Funds are not reported in the government-wide financial statements.
d. Net position of a Private-Purpose Trust Fund is not reported using the net position classifications used in proprietary funds.

10. The accounting and financial reporting concepts are virtually the same for which of the following fund types?
a. Private-Purpose Trust Funds and Permanent Funds
b. Permanent Funds and Pension Trust Funds
c. Pension Trust Funds and Investment Trust Funds
d. Permanent Funds and Agency Funds

  • CreatedOctober 25, 2014
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