CHAPTER 8 QUESTIONS WITH
VERIFIED ANSWERS BY EXPERTS
k Which of the following is needed for a fiduciary relationship to exist?
A. The assets are controlled by outside entities.
B. The assets are derived from the reporting entity's own revenues, which are used to benefit others.
C. The assets are for the benefit of individuals and/or entities that are not part of the reporting entity.
D. The assets are derived from a pass-through grant for which the reporting entity has administrative
responsibility. - C
Which of the following could be considered a fiduciary fund?
A. External investment pool.
B. Permanent fund.
C. Private-purpose trust fund.
D. Both external investment pool and private-purpose trust fund. - D
Which of the following is prepared by fiduciary funds?
A. Statement of fiduciary net position.
B. Statement of fiduciary cash flows.
C. Statement of fiduciary activities.
D. All of the choices are correct. - A
Tax custodial funds
A. Are required to account for a government's collection and remittance of federal and state payroll
taxes.
B. Are used by a county's assessor to compute the amount of taxes due on the properties contained
within the county.
C. Are used to account for the collection and distribution of taxes when one government collects taxes
for multiple funds and governments.
D. Are not allowed to charge for the services rendered to the various governmental funds and other
governments. - C
An investment trust fund should be used when a trust agreement or equivalent arrangement exists and
VERIFIED ANSWERS BY EXPERTS
k Which of the following is needed for a fiduciary relationship to exist?
A. The assets are controlled by outside entities.
B. The assets are derived from the reporting entity's own revenues, which are used to benefit others.
C. The assets are for the benefit of individuals and/or entities that are not part of the reporting entity.
D. The assets are derived from a pass-through grant for which the reporting entity has administrative
responsibility. - C
Which of the following could be considered a fiduciary fund?
A. External investment pool.
B. Permanent fund.
C. Private-purpose trust fund.
D. Both external investment pool and private-purpose trust fund. - D
Which of the following is prepared by fiduciary funds?
A. Statement of fiduciary net position.
B. Statement of fiduciary cash flows.
C. Statement of fiduciary activities.
D. All of the choices are correct. - A
Tax custodial funds
A. Are required to account for a government's collection and remittance of federal and state payroll
taxes.
B. Are used by a county's assessor to compute the amount of taxes due on the properties contained
within the county.
C. Are used to account for the collection and distribution of taxes when one government collects taxes
for multiple funds and governments.
D. Are not allowed to charge for the services rendered to the various governmental funds and other
governments. - C
An investment trust fund should be used when a trust agreement or equivalent arrangement exists and
