Acc 410 Week 8 Quiz – Strayer

ACC 410 Week 8 Quiz – Strayer

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Quiz 6 Chapter 10 and 11

Chapter 10

Permanent Funds and Fiduciary Funds

TRUE/FALSE (CHAPTER 10)

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 (CHAPTER 10)

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)...