Which Is True Regarding the Basis of Accounting for Fiduciary

question 61

Multiple Choice

Which is true regarding the basis of accounting for fiduciary funds?

• A) All four fiduciary fund types are accounted for using the same basis of accounting and measurement focus as proprietary funds.
• B) Agency funds are accounted for using the same basis of accounting and measurement focus as governmental funds, trust funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
• C) Trust funds are accounted for using the same basis of accounting and measurement focus as governmental funds, and agency funds are accounted for using the same basis of accounting and measurement focus as proprietary funds.
• D) All four fiduciary fund types are accounted for using the same basis of accounting and measurement focus as governmental funds.

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Definitions:

Unamortized Discount

The portion of a bond's issue price that is below its face value and has not yet been expensed as interest over the life of the bond.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, including the cost of servicing or carrying debt.

Bargain Purchase Option

A lease agreement term allowing the lessee to purchase the leased asset at the end of the lease term for a price significantly lower than its expected fair market value.

Lease Contract

A legal agreement in which one party permits another to use property, equipment, or facilities for a specified period in exchange for payment.