Chapter 12D - Trust and Agency(Fiduciary Funds Summary of...

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Unformatted text preview: Trust and Agency (Fiduciary) Funds Summary of Interfund–GCA–GLTL Accounting Chapter 12 Learning Objectives Understand & discuss the circumstances when funds are used Define and distinguish among the four types of funds Prepare basic journal entries Prepare Agency Fund financial statements Prepare Trust Fund financial statements Account for common transactions affecting more than one fund and GCA and GLTL accounts Fiduciary Funds used when . . . government holds resources in a trust or agency capacity for the benefit of others. Funds held in fiduciary capacity for Government or its programs – endowment to finance research program or maintain recreational area Others, including individuals, other governments, or private organizations Examples of external fiduciary relationships Pension plans External investment pools Endowments to finance scholarships for residents of government Taxes, insurance premiums, & dues withheld from employees pay to be transferred to others Taxes collected for other governments May use other funds to account for fiduciary relationships Special Revenue Fund – resources available for expenditures Permanent Fund – maintenance of principal required Enterprise Fund – special business-type activities Accountability Focus On the government’s fulfillment of its fiduciary responsibilities during a specified period and on remaining responsibilities at the end of the period Difference in assets and liabilities typically called “ Net Assets Held in Trust” Agency Funds Conduit or clearinghouse funds established to account for assets received for and paid to other funds, individuals, or organizations Only used for assets held for the benefit of others Allowable uses of Agency Funds “Pure” pass-through grants – government serves only as a cash conduit (use of AF mandated by GASB) Payroll deduction collection & payments Imprest checking account Receipts must be allocated among several funds Single expenditure financed by several funds Tax Agency Funds (TAF) Used to combine tax levies from multiple governments in same geographic area Practice avoids duplicating assessment and collection processes Functions of TAF Governments continue to maintain own tax records. Assessments turned over to TAF for collection TAF sends out bills to taxpayers Collections made by TAF Collections distributed to participating governments, less collection fee that goes to government administering the TAF #1 Assessment of Tax [Page 477] Tax Agency Fund Taxes Receivable for Taxing Units...
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This note was uploaded on 10/17/2011 for the course ACCT 4325 taught by Professor Staff during the Spring '08 term at UT Arlington.

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Chapter 12D - Trust and Agency(Fiduciary Funds Summary of...

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