CGFO PUBLIC FINANCE
TEST QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
What are the two types of government revenues? - ANS-Taxes and non tax sources
What two types of taxes do governments receive? - ANS-Property tax and local option
sales tax
What are the non-tax revenue sources? - ANS-Franchise fees, charges for service, fines,
intergovernmental grants, investment income, and other misc revenue
Define tax levy - ANS-The amount of revenue derived from a tax
What is the formula for tax levy? - ANS-Tax base x tax rate / 100
What tax is known as the ad valorem tax? - ANS-property tax
What is the formula for property tax? - ANS-Total assessed value of a property x tax
rate
What is a legal reduction to the tax base or tax liability? - ANS-Tax avoidance
What is an illegal failure to report the total amount of the tax base? - ANS-Tax evasion
How can a tax levy be reduced? - ANS-Through tax avoidance, tax evasion, government
abatements, or exemptions that shrink the tax base
What principle holds that the persons who benefit from a service bear the burden of
the cost? - ANS-Benefits-received principle
What principle holds that taxpayers with greater ability to pay should contribute to a
larger percentage of their income toward service provision? - ANS-Ability-to-pay
principle
What tax structure results in lower income person paying a higher percentage of their
income in taxes? - ANS-Regressive
What tax structure applies higher rates to individuals with a greater ability to pay? -
ANS-Progressive
, What are the five steps for administering taxes? - ANS-1. Determine the tax base 2. Set
the tax rate 3. Administer the tax 4. Process payments 5. Audit for compliance
When generating revenue, what is the government's main goal? - ANS-To generate
revenue with the least possible cost both to itself and the citizens who pay the tax or
purchase the service.
What is the practice of levying a tax base identified, maintained, and taxed by another
entity, usually a higher level of government? - ANS-Piggybacking
What principle concerns the effects that a tax has on consumer or business behavior? -
ANS-Economic efficiency
What are five areas of economic activity that can be distorted by taxes? - ANS-1. Work
vs leisure 2. Business operations 3. Consumption choice 4. Personnel management 5.
Productive investment
Term for whomever ultimately pays the tax - ANS-Tax incidence
What is the greatest source of revenue in Texas? - ANS-property tax
What bill passed the Central Appraisal District in 1979? - ANS-Senate Bill 621
What is the market value of a property - ANS-Appraised value
What typ types of property that can be taxed? - ANS-Real property and personal
property
What property is associated with real estate and includes land and everything
permanently attached to the land? - ANS-Real property
What property includes items that can be moved and are not fixed to the real estate? -
ANS-Personal property
What is tangible property? - ANS-Anything that can be perceived by the senses
What is intangible property? - ANS-Includes ownership interests such as stocks, bonds,
and permits
How should property be appraised - ANS-At 100 percent of market value
What are the phases in a tax year? - ANS-1. Appraisal 2. Equalization 3. Assessment 4.
Collections 5. Delinquent Collections
When must protests and challenges by filed with the Appraisal Review Board? - ANS-
June 1
When must taxing entities approve the tax rate? - ANS-Before Sept 30th or 60 days
following receipt of the certified tax roll
What is the tax rate for government operations usually accounted for in a General
Fund? - ANS-Maintenance and operation rate
TEST QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
What are the two types of government revenues? - ANS-Taxes and non tax sources
What two types of taxes do governments receive? - ANS-Property tax and local option
sales tax
What are the non-tax revenue sources? - ANS-Franchise fees, charges for service, fines,
intergovernmental grants, investment income, and other misc revenue
Define tax levy - ANS-The amount of revenue derived from a tax
What is the formula for tax levy? - ANS-Tax base x tax rate / 100
What tax is known as the ad valorem tax? - ANS-property tax
What is the formula for property tax? - ANS-Total assessed value of a property x tax
rate
What is a legal reduction to the tax base or tax liability? - ANS-Tax avoidance
What is an illegal failure to report the total amount of the tax base? - ANS-Tax evasion
How can a tax levy be reduced? - ANS-Through tax avoidance, tax evasion, government
abatements, or exemptions that shrink the tax base
What principle holds that the persons who benefit from a service bear the burden of
the cost? - ANS-Benefits-received principle
What principle holds that taxpayers with greater ability to pay should contribute to a
larger percentage of their income toward service provision? - ANS-Ability-to-pay
principle
What tax structure results in lower income person paying a higher percentage of their
income in taxes? - ANS-Regressive
What tax structure applies higher rates to individuals with a greater ability to pay? -
ANS-Progressive
, What are the five steps for administering taxes? - ANS-1. Determine the tax base 2. Set
the tax rate 3. Administer the tax 4. Process payments 5. Audit for compliance
When generating revenue, what is the government's main goal? - ANS-To generate
revenue with the least possible cost both to itself and the citizens who pay the tax or
purchase the service.
What is the practice of levying a tax base identified, maintained, and taxed by another
entity, usually a higher level of government? - ANS-Piggybacking
What principle concerns the effects that a tax has on consumer or business behavior? -
ANS-Economic efficiency
What are five areas of economic activity that can be distorted by taxes? - ANS-1. Work
vs leisure 2. Business operations 3. Consumption choice 4. Personnel management 5.
Productive investment
Term for whomever ultimately pays the tax - ANS-Tax incidence
What is the greatest source of revenue in Texas? - ANS-property tax
What bill passed the Central Appraisal District in 1979? - ANS-Senate Bill 621
What is the market value of a property - ANS-Appraised value
What typ types of property that can be taxed? - ANS-Real property and personal
property
What property is associated with real estate and includes land and everything
permanently attached to the land? - ANS-Real property
What property includes items that can be moved and are not fixed to the real estate? -
ANS-Personal property
What is tangible property? - ANS-Anything that can be perceived by the senses
What is intangible property? - ANS-Includes ownership interests such as stocks, bonds,
and permits
How should property be appraised - ANS-At 100 percent of market value
What are the phases in a tax year? - ANS-1. Appraisal 2. Equalization 3. Assessment 4.
Collections 5. Delinquent Collections
When must protests and challenges by filed with the Appraisal Review Board? - ANS-
June 1
When must taxing entities approve the tax rate? - ANS-Before Sept 30th or 60 days
following receipt of the certified tax roll
What is the tax rate for government operations usually accounted for in a General
Fund? - ANS-Maintenance and operation rate
