ACCY 161 Fall 2011 Chapter Eight Study Quiz Try to give a short explanation of your response to false

e statements the answer key will have an explanation to compare to your response. These are all True/False Questions. 1. Fiduciary funds are sometimes identified in the annual reports of state and local governments as "Trust and Agency Funds."

2. If a state or local government is a party to an agency relationship, it must automatically create an agency fund in order to be in conformity with generally accepted accounting principles.

3. An agency fund accounts for assets held by a government for the long-term in the capacity of a trustee for an individual, organization, other fund, or other government.

4. An agency relationship that usually necessitates the creation of an agency fund is the collection of revenues by one government for several of its funds and/or for other governments and their funds.

6. It is common for an agency fund to have relatively small net asset balances.

8. If a state or local government acts as an intermediary between the federal government and beneficiary recipients in processing grant or entitlement resources, those resources should be accounted for in an agency fund.

9. Effective management of cash and investments of individual funds may be enhanced by placing the cash and investments in a pool under the control of the treasurer of the government or other official.

10. When a cash and investments pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of the transfer. . 11. Investment trust funds should be accounted for in the same manner as permanent funds.