Multiple Choice

1.Which of the following characteristics is true of fiduciary funds?

a.they report assigned fund balances

b.their net assets are unavailable to finance government programs

c.they prepare statements of cash flows for external reporting

d.their net assets cannot have debit balances under any circumstances

2.If a government participates in a defined contribution pension plan, which of the following always will be true?

a.the government will report expenditures/expenses for pension contributions

b.the government will maintain one or more pension trust funds

c.the government will record its pension transactions based on actuarial values

d.the government will have no liability for other postemployment benefits

3.Which of the following types of pension plans results in a government bearing the risk that investments do not yield an expected return?







4.Which of the following is not a fiduciary fund?

a.pension trust fund

b.permanent fund

c.private-purpose trust fund fund

5.Which of the following is not a characteristic of a defined benefit pension plan?

a.Benefits are based on actual contributions plus amounts earned on the contributions

b.Benefits are linked to the number of years worked by the employee

c.Benefits are based on a formula that considers salaries earned by the employee

d.Benefits, rather than contributions, are guaranteed by the employer

6.On what basis are investments valued in the financial statements of a Pension Trust Fund? cost the lower of cost or market value of each individual security fair value actuarial value

7.Which of the following type of pension plans results in all the employers participating in the plan being liable for the accumulated liabilities of the plan?

a. sole-employer plan

b.multiple-employer plan

c.defined contribution plan

d.cost-sharing plan

8.Which of the following statements is true regarding an agent multi-employer pension plan?

a.the annual required pension contributions are unique to each participating employer

b.the annual required pension contributions are uniform for each participating employer

c.a participating government legally must make the required annual contribution in full each year

d.a participating government must account for its pension contributions using a pension trust fund

9.Under which of the following circumstances will a government maintain a Pension Trust Fund?

a.the government contributes to a defined benefit pension plan

b.the government sponsors a defined benefit pension plan

c.the government contributes to a defined contribution pension plan

d.the government has an unfunded actuarial pension liability

10.What are the two components of an actuary’s calculation of the required annual contribution to a Pension Trust Fund?

a.the net pension obligation and the actuarial accrued liability

b.the regular cost and the normal cost

c.the amortization of the actuarial value of assets and the actuarial accrued liability

d.the normal cost and the amortization of the unfunded actuarial accrued liability

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