Question

The term "fiduciary funds" applies to:

Multiple Choice

• enterprise, internal service, and private-purpose trust funds.

• private-purpose trust, investment trust, pension trust and agency funds.

• enterprise and internal service funds.

• pension, investment trust and enterprise funds.

Answer 1

Solution

Answer: Private-purpose trust, Investment trust, Pension trust, and Agency Funds

Explanation:

A Fiduciary Fund is used in governmental accounting to report on assets held in trust for others. When financial statements are prepared for fiduciary funds, they are presented using the economic resources measurement focus and the accrual basis of accounting. The required financial statements for a fiduciary fund are as follows:

• Statement of fiduciary net position

• Statement of changes in fiduciary net position

The fiduciary funds classification includes the following funds:

• Agency funds. Used to report on resources held in a custodial capacity, where funds are received, temporarily invested, and remitted to other parties.

• Investment trust funds. Used to report the external portion of an investment pool that is reported by the sponsoring government.

• Pension and employee benefit trust funds. Used to report on assets held in trust for pension plans, other post-employment benefit plans, and employee benefit plans.

• Private-purpose trust funds. Used to report on trust arrangements where the individuals, private organizations, and other governments are the beneficiaries.