Reference no: EM132450278

Discussion :

For each of the following, indicate the fund, if any in which the government would account for the resources described. If a fiduciary, rather than a governmental fund, indicate the type of fund. Briefly justify your response.

1. A government contributes to a pension fund maintained by a union representing some of its employees. The government determines all significant terms of the plan, most notably eligibility requirements and retiree benefits. However, all investment decisions, including when to buy and sell securities are made by a committee composed of union officers.

2. A government holds the assets that its employees contribute to a defined contribution plan. It maintains the assets in separate trust funds for each employee and each employee can select among several mutual funds in which to invest the assets.

3. A high school requires its athletic booster association to deposit with the school any cash it may have collected from members or earned through its activities. The school does not monitor or control how the association spends its resources. Upon request of the association, the school writes a check either to the association itself or to a party designated by the association. Essentially, the school serves merely as the association's banker.

4. A high school requires its athletic booster association to deposit with the school any cash it may have collected from members or earned through its activities. All expenditures of the association must be approved by the school's athletic director to ensure that they conform to school policies.

5. A county maintains an investment pool to which towns within its jurisdiction can deposit their cash reserves. Investment pool policies specify that it can invest only a securities that have short-term maturities and satisfy other criteria that make them highly liquid. The pool is considered a trust and the assets are thereby protected from the claims of the government's creditors.

6. A county maintains an investment pool to which its various proprietary activities, such as its transportation service and its water utility can deposit their cash reserves. Investment pool policies specify that it can invest only in securities that have short-term maturities and satisfy other criteria that make them highly liquid.