Accounting for Governmental and Nonprofit Entities 18e (Reck) Chapter 8 - Wiley College ACCOUNTING MISC

Accounting for Governmental and Nonprofit Entities 18e (Reck) Chapter 8 - Wiley College ACCOUNTING MISC Chapter 8 Accounting for Fiduciary Activities—Custodial and Trust Funds 1) According to the GASB, control of an asset means the government must have the asset in its possession. Answer: FALSE 2) By definition a fiduciary fund that does not meet the definition of a trust fund is a custodial fund. Answer: TRUE 3) Resources that are held in trust for the benefit of the government's own programs or its citizenry should be accounted for using a governmental fund rather than a fiduciary fund. Answer: TRUE 4) Custodial funds are used only if a government holds resources in a custodial capacity for others. Answer: TRUE 5) Unless otherwise prohibited custodial relationships can be reported in the General Fund rather than a custodial fund. Answer: TRUE 6) The collection of taxes or other revenues by one government for several of the funds it operates and for other governments often results in the creation of a trust fund. Answer: FALSE 7) Because a government does not have any administrative decision making, a custodial fund would not prepare a statement of net position. Answer: FALSE 8) A custodial fund should be used to account for special assessment billing and collection, and related debt service of special assessment debt, if the government has no responsibility for the debt. Answer: TRUE 9) It is common for a government that collects taxes on behalf of other governments to be authorized to withhold a certain percentage from the collections for each government. Answer: TRUE 10) In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement. Answer: FALSE 11) On the sta