Question

The major issue relating to agency funds is when they should be established. Consider each of the following situations. Indicate whether (and why or why not) you think that the government should account for the transactions and resources in an agency fund, a governmental fund. or some other type of fiduciary fund. Not all the situations have been explicitly addressed in the text. Therefore, you may have to generalize from those that have been discussed

1. A city extended sewer and water lines to a recently annexed community. Per agreement with the community, the improvemenls are to be paid forentirely by local residents. To finance the improvements, the city issued 10-year notes on behalf of the residents. lt assessed the residents for the amount of the debt, plus interest. The city guaranteed the notes and agreed to collect the assessments from the resi­dents and make appropriate payments to the note holders. However, the city's role is primarily one of an intermediary. The residents, not the city, are expected to service the debt.

2. A state receives a federal law-enforcement grant intended to assist local communities in hiring addi­tional police officers. The federal granting agency selects the cities and counties that are to receive the awards and determines the amounts they are to receive. The federal government, not the state, is responsible for monitoring grant compliance. The state's only responsibility is to write the checks to the cities and counties.

3. A state receives a federal educational grant intended to assist local school districts in hiring additional teachers. The federal granting agency establishes the criteria that the state is to use in determining the school districts to receive the awards and the amounts they are to receive. The district has no discretion in selecting recipients other than to apply the specified criteria.

4. A county collects sales taxes that it distributes among itself and the towns within its jurisdiction . The taxes are levied by the county and are divided among the rec

Answer 1

Ans:-

• In case 1 government should account or the cost drew in with the trade as the water and sewer lines are basic solaces and in addition these council ought to use its benefits as opposed to issuing notes on the names of tenants.
• It is the obligation of the lawmaking body to suit key extravagances not the individual.
• As the store is encountering state, state government should check the most ideal methodology are sought after and the necessities are met.
• Office holds are locked in with this trade.
• For this circumstance the benefits are given by the legislature, anyway it is the obligation of state to screen and record for the advantages being utilized.
• As obligation is an open trade so government is out charge of the administering of the hold and in charge of the money consumed.