CGFM Exam 2 - Section 1 Questions and
Answers (Rated A+)
Taxes - Answer-Resources for gov are derived primarily from
Grants and shared revenues - Answer-Gobs receive revenue from other levels of gov
through
Budget - Answer-Primary control device in gov
Financial reporting - Answer-Primary mechanism to demonstrate accountability
Financial reports - Answer-Shows how much was raised, how it was spent, and whether
spending followed the budget
Performance reports - Answer-Inform users how well gov is operating and whether it is
achieving goals in effective/efficient manner
10th Amendment - Reserve Clause - Answer-Establishes two levels of gov - federal and
state based on delegation of powers
Interperiod Equity - Answer-Current period taxpayer's are paying current period's
services
Accountability - Answer-Cornerstone of financial reporting
Gov accountability - Answer-Based on belief that gov has responsibility to report, public
has right to know, and ultimate power belongs to people
Ballot box, referendum, initiatives - Answer-How people exercise power
Legal accountability - Answer-Need to comply with laws, rules, regulations
Performance accountability - Answer-Ensuring government act in efficient, effective, or
economic manner
Fiscal accountability - Answer-Associated with raising of resources and allocation of
those resources accomplish objectives
Operational accountability - Answer-Associated with stewardship of public resources.
Public officials must ensure resources are used appropriately
Performance measures and performance reporting - Answer-Ways to address
operational accountability
,Executive branch - Answer-Accountable to legislative branch and the public
Operating in efficient and effective manners, collecting and using revenues - Answer-
How is executive branch accountable to public
Using resources in accordance with legislative mandates within fiscal constraints
imposed by legislative branch - Answer-How is executive branch accountable to
legislative branch
Legislative branch - Answer-Accountable to public for raising of resources and for
determining how those resources are to be used
Debt ceiling - Answer-Accountability mechanism that allows congress to monitor
financial effects of spending and tax policies
Determine compliance with contractual agreements related to debt issues - Answer-
How do investors and creditors use financial reports
Assess accountability and help make social, economic, and political decisions - Answer-
How do financial reports assist users
Financial reporting - Answer-Primary communication device for assessing accountability
GASB Concept Statement No 1 - Answer-Contains hierarchy of objectives of financial
operations and how the operations focus on accountability
Accountbaility - Answer-Overall goal listed in GASB Concept Statement No 1
Raising resources and for determining how resources are to be used - Answer-Public
officials are responsible for
Enactment of budget - Answer-Primary responsibility of public officials involves
Results of operations - Answer-Financial reporting should provide info about
Point in time reports and period reports - Answer-Two types of financial reports
Point in time reports - Answer-Provides current info as of date of the report (balance
sheet)
Period reports (flow reports) - Answer-Covers entire FY (operating statement, cash flow
statement)
General purpose external financial reports (GPEFR) - Answer-Consist primarily of
audited financial statements, including notes, RSI, and other info
, Basic or principal financial statements - Answer-Another name for audited financial
statements
Summary/Popular reports - Answer-Reports that are shorter and contain narrative,
pictures, graphs
AGAs Citizen Centric Report - Answer-Example of summary/popular report
Understandability, reliability, relevance, timeliness, consistency, comparability - Answer-
Characteristics of financial reports
Expressed as simple as possible, include explanations and interpretations - Answer-
Understandability of reports
Should be verifiable, free from bias, and faithfully represent what it purports to
represent. Nothing material omitted. Needs to be comprehensive to be reliable. -
Answer-Reliability of reports
Timely and reliable - Answer-Relevance of reports
Reported in time frame that enables users to base decisions on it. Precise detail may be
sacrificed - timely estimate more useful than precise amount - Answer-Timeliness of
reports
Once accounting principle is used, it is presumed that future info is reported used same
principle. If change is necessary, nature and reason of change should be disclosed as
well as effect of change - Answer-Consistency of reports
Like entities should report same info in same way - Answer-Comparability of reports
Recovery.gov - Answer-Created to allow citizens to monitor progress in awarding
funding intended to stimulate economy and create jobs
Recovery.gov - Answer-Catalyst in expanding access to disaggregated gov financial
info
Open Gov Initiative - Answer-Effort by fed gov to create level of openness in gov
Connected gov act - Answer-Federal websites are required to be mobile friendly
Digital Accountability and Transparency Act (DATA Act) - Answer-Established
requirement for development of gov wide financial data standards and increased
availability, accuracy, and usefulness of fed spending info
Answers (Rated A+)
Taxes - Answer-Resources for gov are derived primarily from
Grants and shared revenues - Answer-Gobs receive revenue from other levels of gov
through
Budget - Answer-Primary control device in gov
Financial reporting - Answer-Primary mechanism to demonstrate accountability
Financial reports - Answer-Shows how much was raised, how it was spent, and whether
spending followed the budget
Performance reports - Answer-Inform users how well gov is operating and whether it is
achieving goals in effective/efficient manner
10th Amendment - Reserve Clause - Answer-Establishes two levels of gov - federal and
state based on delegation of powers
Interperiod Equity - Answer-Current period taxpayer's are paying current period's
services
Accountability - Answer-Cornerstone of financial reporting
Gov accountability - Answer-Based on belief that gov has responsibility to report, public
has right to know, and ultimate power belongs to people
Ballot box, referendum, initiatives - Answer-How people exercise power
Legal accountability - Answer-Need to comply with laws, rules, regulations
Performance accountability - Answer-Ensuring government act in efficient, effective, or
economic manner
Fiscal accountability - Answer-Associated with raising of resources and allocation of
those resources accomplish objectives
Operational accountability - Answer-Associated with stewardship of public resources.
Public officials must ensure resources are used appropriately
Performance measures and performance reporting - Answer-Ways to address
operational accountability
,Executive branch - Answer-Accountable to legislative branch and the public
Operating in efficient and effective manners, collecting and using revenues - Answer-
How is executive branch accountable to public
Using resources in accordance with legislative mandates within fiscal constraints
imposed by legislative branch - Answer-How is executive branch accountable to
legislative branch
Legislative branch - Answer-Accountable to public for raising of resources and for
determining how those resources are to be used
Debt ceiling - Answer-Accountability mechanism that allows congress to monitor
financial effects of spending and tax policies
Determine compliance with contractual agreements related to debt issues - Answer-
How do investors and creditors use financial reports
Assess accountability and help make social, economic, and political decisions - Answer-
How do financial reports assist users
Financial reporting - Answer-Primary communication device for assessing accountability
GASB Concept Statement No 1 - Answer-Contains hierarchy of objectives of financial
operations and how the operations focus on accountability
Accountbaility - Answer-Overall goal listed in GASB Concept Statement No 1
Raising resources and for determining how resources are to be used - Answer-Public
officials are responsible for
Enactment of budget - Answer-Primary responsibility of public officials involves
Results of operations - Answer-Financial reporting should provide info about
Point in time reports and period reports - Answer-Two types of financial reports
Point in time reports - Answer-Provides current info as of date of the report (balance
sheet)
Period reports (flow reports) - Answer-Covers entire FY (operating statement, cash flow
statement)
General purpose external financial reports (GPEFR) - Answer-Consist primarily of
audited financial statements, including notes, RSI, and other info
, Basic or principal financial statements - Answer-Another name for audited financial
statements
Summary/Popular reports - Answer-Reports that are shorter and contain narrative,
pictures, graphs
AGAs Citizen Centric Report - Answer-Example of summary/popular report
Understandability, reliability, relevance, timeliness, consistency, comparability - Answer-
Characteristics of financial reports
Expressed as simple as possible, include explanations and interpretations - Answer-
Understandability of reports
Should be verifiable, free from bias, and faithfully represent what it purports to
represent. Nothing material omitted. Needs to be comprehensive to be reliable. -
Answer-Reliability of reports
Timely and reliable - Answer-Relevance of reports
Reported in time frame that enables users to base decisions on it. Precise detail may be
sacrificed - timely estimate more useful than precise amount - Answer-Timeliness of
reports
Once accounting principle is used, it is presumed that future info is reported used same
principle. If change is necessary, nature and reason of change should be disclosed as
well as effect of change - Answer-Consistency of reports
Like entities should report same info in same way - Answer-Comparability of reports
Recovery.gov - Answer-Created to allow citizens to monitor progress in awarding
funding intended to stimulate economy and create jobs
Recovery.gov - Answer-Catalyst in expanding access to disaggregated gov financial
info
Open Gov Initiative - Answer-Effort by fed gov to create level of openness in gov
Connected gov act - Answer-Federal websites are required to be mobile friendly
Digital Accountability and Transparency Act (DATA Act) - Answer-Established
requirement for development of gov wide financial data standards and increased
availability, accuracy, and usefulness of fed spending info
