ACCT 4421 Final (9-11, & NFP) - Lists and
Criteria Questions and Answers Verified by
Experts
What are the GASB required disclosures for pension plans? (Referring to the funds
PROVIDING the pension contributions) Correct Answ_- Detailed description of the plan
- Employer's funding policy
- Components of pension cost and changes in net pension obligation
- Key assumptions used in determining pension cost
- Significant ratios
Pension plans are typically accounted for in a fiduciary fund. What should pension plans provide,
according to GASB? (Referring to the funds RECEIVING the pension contributions) Correct
Answ_1. Plan assets, liabilities, and net assets available for benefits
2. Year-to-year changes in net assets available for benefits
3. The funded status of the plan from a long term perspective
4. The contribution requirements of employers and employees
5. Two required supplementary schedules: Schedule of Funding Progress AND Schedule of
EmployER Contributions
,~List the differences brought about by the new GASB standards for Single Employer Plans
Correct Answ_- Liability not adjusted for unamortized amounts
- Plan assets reported at fair value (not market-related)
- All governments must use entry age actuarial cost method
- Discount rate is now a blended rate that reflects long term expected rate of return on plan assets
and a tax-exempt high municipal bond index rate
- Shortened amortization periods
List the steps for preparing the G/W Statements from the Fund Statements Correct Answ_1.
Start with year-end trial balance that combines all governmental funds
2. Eliminate inter-fund transactions
3. Adjust capital asset related accounts
4. Adjust long-term debt related accounts
5. Adjust for difference in basis of accounting (modified to full accrual)
6. Consolidate the ISF
7. Complete G/W trial balance
8. Divide accounts between the Statement of Net Position and the Statement of Activities and
then among the various functional accounts
, Who are considered primary governments? Correct Answ_1. All state governments
2. General-purpose local governments (parishes, cities, towns)
3. Special-purpose governments (like a local school district) that pass the SELF test
What 3 criteria must special-purpose governments meet to be considered a primary government?
Correct Answ_*SELF
1. Separately Elected governing body
2. Legally separate from other PGs
3. Fiscally independent of other governments
When a government is said to be "fiscally independent," it has the authority, without approval
from other governments, to do what 3 things? Correct Answ_1. Determine its budget
2. Levy taxes or set rates and charges
3. Issue bonds
A Component Unit is a legally separate organization for which the elected officials of the
Primary Government are financially accountable. What criteria must the PG meet to be
Criteria Questions and Answers Verified by
Experts
What are the GASB required disclosures for pension plans? (Referring to the funds
PROVIDING the pension contributions) Correct Answ_- Detailed description of the plan
- Employer's funding policy
- Components of pension cost and changes in net pension obligation
- Key assumptions used in determining pension cost
- Significant ratios
Pension plans are typically accounted for in a fiduciary fund. What should pension plans provide,
according to GASB? (Referring to the funds RECEIVING the pension contributions) Correct
Answ_1. Plan assets, liabilities, and net assets available for benefits
2. Year-to-year changes in net assets available for benefits
3. The funded status of the plan from a long term perspective
4. The contribution requirements of employers and employees
5. Two required supplementary schedules: Schedule of Funding Progress AND Schedule of
EmployER Contributions
,~List the differences brought about by the new GASB standards for Single Employer Plans
Correct Answ_- Liability not adjusted for unamortized amounts
- Plan assets reported at fair value (not market-related)
- All governments must use entry age actuarial cost method
- Discount rate is now a blended rate that reflects long term expected rate of return on plan assets
and a tax-exempt high municipal bond index rate
- Shortened amortization periods
List the steps for preparing the G/W Statements from the Fund Statements Correct Answ_1.
Start with year-end trial balance that combines all governmental funds
2. Eliminate inter-fund transactions
3. Adjust capital asset related accounts
4. Adjust long-term debt related accounts
5. Adjust for difference in basis of accounting (modified to full accrual)
6. Consolidate the ISF
7. Complete G/W trial balance
8. Divide accounts between the Statement of Net Position and the Statement of Activities and
then among the various functional accounts
, Who are considered primary governments? Correct Answ_1. All state governments
2. General-purpose local governments (parishes, cities, towns)
3. Special-purpose governments (like a local school district) that pass the SELF test
What 3 criteria must special-purpose governments meet to be considered a primary government?
Correct Answ_*SELF
1. Separately Elected governing body
2. Legally separate from other PGs
3. Fiscally independent of other governments
When a government is said to be "fiscally independent," it has the authority, without approval
from other governments, to do what 3 things? Correct Answ_1. Determine its budget
2. Levy taxes or set rates and charges
3. Issue bonds
A Component Unit is a legally separate organization for which the elected officials of the
Primary Government are financially accountable. What criteria must the PG meet to be
