Question

The financial position of the City Employee Retirement Fund administered by the city should be reported in the city's basic financial statements as a column in the:

A) Balance sheet—governmental funds.
B) Statement of fiduciary net position.
C) Statement of net position at the government-wide level.
D) Both B and C.

Answer 1

The City Employee Retirement Fund, administered by the city, should be reported in the Statement of fiduciary net position, because it is a fiduciary activity and the city holds these resources in trust for others.

Step-by-step explanation:

The financial position of the City Employee Retirement Fund administered by the city should be reported as a column in the Statement of fiduciary net position. This is because the fund is a fiduciary activity, which means that the city holds these funds in a trustee or agency capacity for the benefit of others, such as city employees and their beneficiaries.

Fiduciary activities are not reported in the governmental funds financial statements or at the government-wide level, because the resources are not available to finance the government's own programs. According to the Generally Accepted Accounting Principles (GAAP), which apply to the public sector in the United States, fiduciary activities should be reported only in the Statement of fiduciary net position.