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Unformatted text preview: CHAPTER 8: ACCOUNTING FOR FIDUCIARY ACTIVITIES- AGENCY AND TRUST FUNDS OUTLINE Number Topic Type/Task Status (re: 13/e) Questions: 8-1 Distinction between agency and trust funds Distinguish Same 8-2 Purpose of fiduciary funds Explain Same 8-3 Agency funds and payroll issues Explain Revised 8-4 No fund equity in agency funds Explain Same 8-5 Special assessment agency funds Describe Same 8-6 Investment pools Explain New 8-7 Investment pools Describe 8-8 8-8 Private and public purpose trusts Distinguish New 8-9 Defined benefit and contribution pension plans Describe Same 8-10 Defined benefit plan financial statements Explain Same Case : 8-1 Internet Case - PERS Locate and Explain New 8-2 Identification of fiduciary funds Explain Revised Exercises/Problems: 8-1 Examine the CAFR Examine Same 8-2 Various agency and trust fund issues Multiple Choice New & Revised 8-3 Various agency and trust fund issues Multiple Choice 8-1, 8-2, 8-3 and 8-10 New 8-4 Tax agency fund Journal Entries 8-5 Revised 8-5 Special assessment agency fund JEs, FS 8-6 8-6 Pass-through agency fund JEs, FS 8-7 8-7 Investment trust fund Journal Entries 8-8 Revised 8-8 Defined benefit pension plan Calculate 8-9 8-9 Defined benefit pension plan statements Financial statements 8-10 Revised 8-10 Fiduciary financial statements Analysis New 8-1 CHAPTER 8: ACCOUNTING FOR FIDUCIARY ACTIVITIES AGENCY AND TRUST FUNDS Answers to Questions 8-1. Although in law there is a clear distinction between an agency relationship and a trust relationship, in practice the legalistic distinctions are not sufficient to classify funds as agency funds or trust funds . As the introduction to Chapter 8 explains, the name given the fund is not a reliable criterion for identifying the types of transactions in which the fund may engage. All factors, such as the enactment that created the fund and pertinent regulations, must be examined to determine the nature of the fund and the transactions in which it may engage. Generally, trust funds are more complicated than agency funds, requiring greater representation and development of the beneficiarys interest. 8-2. Fiduciary funds are used to account for assets held by a government acting as a trustee or agent for individuals, organizations, or other governments. The use of fiduciary funds promotes accountability and demonstration of compliance with laws, regulations, and contractual agreements, including the trust or agency. 8-3. No. Unless the use of an agency fund is mandated by law or by GASB standards, accounting for agency relationships may occur within the funds where the agency relationship arises. It is common practice, for example, to account for employee withholding taxes, retirement contributions, and social security taxes within the funds that account for the gross pay of the employees in this case, the General Fund....
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- Spring '10