EX. 10-1 Select the best answer. Items 1 through 5 refer to Riverview City.

1. Riverview City received a gift of $1 million. The sum is to be maintained as an endowment, with income used to preserve and improve the city's jogging trails. The $1 million should be reported in

a. a governmental fund. b. an 2a7like fund. c. a fiduciary fund. d. a proprietary fund.

2. Riverview City collected $80 million in property taxes on behalf of the Riverview Independent School District. The $80 million should be reported in

a. a governmental fund. b. a custodial fund. c. a private purpose trust fund. c. a proprietary fund.

3. The $80 million collected by Riverview City would be reflected in its statement of fiduciary net position as cash and an offsetting

a. liability

b. net position account. c. fund balance. d. custodial reserve.

4. In the city's governmentwide statements, the $80 million would be reported as

a. a liability. b. a reserve. c. net assets. d. none of the above.

5. The city maintains a $1million endowment to provide financial assistance to needy retired employees and their families. In its governmentwide statements, the $1 million would be reported as an asset in the column for

a. governmental activities. b. businesstype activities. c. totals, but not in the column for either governmental or businesstype activities. d. none of the above.

6. As of yearend, a city's pension plan had $1.5 million in current obligations to retired employees. The city would report this amount as a liability on

a. the pension plan statements only. b. the pension trust fund statements and the governmentwide statements. c. the governmentwide statements only. d. neither the pension trust fund statements nor the governmentwide statements.

7. A commercial office building held as an investment in an investment pool should be reported at

a. historical cost. b. present value of estimated cash flows. c. fair value. d. depreciated historical cost.

8. Which of the following would not be reported on a pension plan's statement of plan net position?

a. Longterm investments at fair value b. Current liabilities to retirees c. Net assets held in trust for pension benefits d. Actuarial accrued liabilities to current and retired employees

9. A city received a donation of $10 million. The amount was to be set aside in an endowment fund with income only to be used to preserve and improve its parks. In the year it was received the $10 million should be

a. recognized as revenue in a special revenue fund. b. recognized as a direct increase to fund balance in a permanent fund. c. recognized as revenue in a permanent fund. d. recognized as revenue in a fiduciary fund.

10. In a particular year, the Haynes Independent School District collects $100 million in property taxes. State law requires that propertyrich school districts appropriate and contribute 2 percent of all property taxes that they collect to a state pool, which will be divided among propertypoor districts. Upon receipt of the taxes, the Haynes district, which the state considers a propertyrich district, should account for

a. $100 million in a custodial fund. b. $98 million in a governmental fund and $2 million in a custodial fund. c. $100 million in a governmental fund. d. $98 million in a governmental fund and $2 million in a fiduciary fund other than a custodial fund.