Vacation LEAVE should be accrued as a liability as long as employees have earned the time off and the employer is expected to compensate employees for it in the future. However, only the portion of the liability expected to be liquidated with expendable available financial resources should be reported as a governmental fund obligation. The balance should be reported as a liability on the government wide statement of net assets (e.g. Dr. Vacation pay Expenditure and Cr. Cash Government Fund)

S1: Under a defined contribution plan, the amount of a participant’s future benefits is determined by the contributions paid by the employer, the participant, or both, and the operating efficiency and investment earnings of the fund. S2: Under a defined benefit plan, the payment of promised retirement benefits depends on the financial position of the plan and the ability of contributors to make future contributions to the plan as well as the investment performance and operating efficiency of the plan. Only S1 is true None is true Only S2 is true Both are true

Which statement is true concerning the recognition and measurement of a defined contribution plan? The contribution shall be recognized as an expense in the period it is payable. Any unpaid contribution at the end of the period shall be recognized as accrued liability. All statements are true. Any excess contribution shall be recognized as prepaid expense but only to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

Which of the following is true about plan assets? Any excess return on plan assets are earned to the benefit of the company Includes qualifying insurance policies None of the statements are correct These are assets held for short-term purpose in the event of employee retirement during the year

Which of the following statements regarding asset ceilings for overfunded and underfunded pension plans is true?   A. For underfunded pension plans, the issue is whether the sponsoring entity can realize the benefits of the underfunding either through reducing or stopping its contributions in the future or through withdrawing surplus funds.   B. An overfunded pension results in a net defined benefit liability on the SFP.   C. An underfunded pension has a fair value of plan assets that is less than the DBO.   D. An asset ceiling is the minimum benefit that the employer can realize by reducing or stopping future contributions to a defined benefit pension plan.

Revenues that are legally restricted to expenditures for specified purposes should be accounted for in special revenue funds, includinga. accumulation of resources for payment of general long-term debt principal and interest.b. pension trust fund revenues.c. gasoline taxes to finance road repairs.d. proprietary fund revenues.

Which of the following is not a characteristic of a defined-contribution pension plan? The employer's contribution each period is fixed. If the employer does not make contribution in full, then it reports a pension liability.  If the employer contributes more than the required amount, then it reports a pension asset. An appropriate funding pattern must be established to ensure that the promised benefits at employees’ retirement will be met. The benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee.

What is the GASB standard for reporting expenditures from governmental funds for employee pension benefits and retiree health care benefits?

Which of the following adjustments would likely be made when moving from governmental funds financial statements to government-wide financial statements? a. Record an additional expense for compensated absences b. Record an additional expense related to salaries earned at year-end c. Both of the above d. Neither of the above

Which of the following is not a requirement for expense reimbursements to be an accountable plan? Select one: a. Excess amounts must be returned to the employer within a reasonable period of time b. The employee must provide adequate documentation within a reasonable period of time c. The expense is incurred for sales or marketing purposes d. The expense is incurred for business purposes