CGFM Exam 2 Questions & Answers
(Grade A+)
I 1.The Defense Logistics Agency holds jet fuel as inventory, which it
sells to support flight operations. The table on the left provides
beginning/ending fiscal year 2017 inventory levels and purchase
information. Assuming the agency uses the FIFO inventory
valuation method, what was the cost of goods sold for jet fuel in
fiscal year 2017? -
correct answer : $133.50
I 2.In financial reporting, consistency of communication means -
correct answer : if accounting principles have changed or if the
financial reporting entity has changed, the nature and reason for
the change, as well as the effect of the change, should be disclosed.
I 3.Budgeting is an element of which policy? -
correct answer : fiscal
I 4.Another term for the federal government baseline budget is -
correct answer : a current level of service budget.
I 5.As described by FASAB, the four groups of people to whom the
government is accountable and are, therefore, potential users of
federal financial statements are -
,CGFM Exam 2 Questions & Answers
(Grade A+)
correct answer : citizens, Congress, executives, and program
managers.
I 6.When establishing an allowance for doubtful accounts, the
journal entry required is a debit to -
correct answer : Bad Debts Expense and a credit to the Allowance
for Doubtful Accounts.
I 7.Street resurfacing is a type of which budget element? -
correct answer : program
I 8.Which of the following is a correct accounting entry when one
government agency receives a grant from another government
agency? -
correct answer : The grantor agency recognizes liability and the
recipient agency recognizes non-exchange revenue when the
recipient agency meets all eligibility requirements.
I 9.Which of the following sources of accounting principles is at the
top of the GASB hierarchy? -
correct answer : Generally Accepted Accounting Principles
,CGFM Exam 2 Questions & Answers
(Grade A+)
I 10.The role of the International Public Sector Accounting
Standards Board is to -
correct answer : set standards for the general purpose financial
statements of international public sector entities.
I 11.A state needs to determine its indirect cost rate for fringe
benefits as a function of direct salaries costs of $3 million. Based on
the information shown on the left, the indirect cost is -
correct answer : 10.8%
I 12.Non-exchange revenue includes inflows of resources arising
from -
correct answer : taxes, fines and penalties from the private sector.
I 13.A group of activities within a function are known as -
correct answer : a program.
I 14.In financing capital projects, special assessments are used to
ensure that -
correct answer : the individuals benefiting from the project are the
ones who pay for it.
, CGFM Exam 2 Questions & Answers
(Grade A+)
I 15.The organizations that establish the standards used by their
constituents for external reporting purposes include FASB, FASAB,
GASB and -
correct answer : International Public Sector Accounting Standards
Board.
I 16.Which of the following terms describes costs an agency incurs
on behalf of another agency? -
correct answer : inter-entity
I 17.State and local governments need cost information to receive
reimbursements for allowable costs for federal grants, while federal
agencies are required to have cost accounting concepts in the
preparation of what type of statements? -
correct answer : financial statements
I 18.State and local governments use encumbrances as the major
budgetary control tool to ensure availability of funds prior to
entering agreements, while the federal government instills
budgetary control using -
correct answer : commitments and obligations.
(Grade A+)
I 1.The Defense Logistics Agency holds jet fuel as inventory, which it
sells to support flight operations. The table on the left provides
beginning/ending fiscal year 2017 inventory levels and purchase
information. Assuming the agency uses the FIFO inventory
valuation method, what was the cost of goods sold for jet fuel in
fiscal year 2017? -
correct answer : $133.50
I 2.In financial reporting, consistency of communication means -
correct answer : if accounting principles have changed or if the
financial reporting entity has changed, the nature and reason for
the change, as well as the effect of the change, should be disclosed.
I 3.Budgeting is an element of which policy? -
correct answer : fiscal
I 4.Another term for the federal government baseline budget is -
correct answer : a current level of service budget.
I 5.As described by FASAB, the four groups of people to whom the
government is accountable and are, therefore, potential users of
federal financial statements are -
,CGFM Exam 2 Questions & Answers
(Grade A+)
correct answer : citizens, Congress, executives, and program
managers.
I 6.When establishing an allowance for doubtful accounts, the
journal entry required is a debit to -
correct answer : Bad Debts Expense and a credit to the Allowance
for Doubtful Accounts.
I 7.Street resurfacing is a type of which budget element? -
correct answer : program
I 8.Which of the following is a correct accounting entry when one
government agency receives a grant from another government
agency? -
correct answer : The grantor agency recognizes liability and the
recipient agency recognizes non-exchange revenue when the
recipient agency meets all eligibility requirements.
I 9.Which of the following sources of accounting principles is at the
top of the GASB hierarchy? -
correct answer : Generally Accepted Accounting Principles
,CGFM Exam 2 Questions & Answers
(Grade A+)
I 10.The role of the International Public Sector Accounting
Standards Board is to -
correct answer : set standards for the general purpose financial
statements of international public sector entities.
I 11.A state needs to determine its indirect cost rate for fringe
benefits as a function of direct salaries costs of $3 million. Based on
the information shown on the left, the indirect cost is -
correct answer : 10.8%
I 12.Non-exchange revenue includes inflows of resources arising
from -
correct answer : taxes, fines and penalties from the private sector.
I 13.A group of activities within a function are known as -
correct answer : a program.
I 14.In financing capital projects, special assessments are used to
ensure that -
correct answer : the individuals benefiting from the project are the
ones who pay for it.
, CGFM Exam 2 Questions & Answers
(Grade A+)
I 15.The organizations that establish the standards used by their
constituents for external reporting purposes include FASB, FASAB,
GASB and -
correct answer : International Public Sector Accounting Standards
Board.
I 16.Which of the following terms describes costs an agency incurs
on behalf of another agency? -
correct answer : inter-entity
I 17.State and local governments need cost information to receive
reimbursements for allowable costs for federal grants, while federal
agencies are required to have cost accounting concepts in the
preparation of what type of statements? -
correct answer : financial statements
I 18.State and local governments use encumbrances as the major
budgetary control tool to ensure availability of funds prior to
entering agreements, while the federal government instills
budgetary control using -
correct answer : commitments and obligations.
