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Unformatted text preview: ACCY 161 Spring 2010 Chapter Eight Study Quiz with Answers 1. Fiduciary funds are sometimes identified in the annual reports of state and local governments as "Trust and Agency Funds." TRUE Fiduciary funds account for assets held by a government under a trust relationship or an agency relationship. 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. FALSE An agency fund must be created only if required by law or GASB standards. In other instances an agency fund may be created by administrative decision. If not required by law or administrative decision, an agency relationship may be accounted for by the General Fund (or other fund) if the agency relationship is incidental to the primary purposes of the General Fund (or other fund), the amounts tend to be small in relation to total expenditures of the General Fund, and the agency relationship is ordinarily discharged on a rather current basis.relationship is ordinarily discharged on a rather current basis....
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- Fall '10