CPFO OPERATING AND CAPITAL
BUDGETING SAMPLE EXAM QUESTIONS
AND ANSWERS
Which of the following is a necessary ingredient of a good budget process
according to the National Advisory Council on State and Local Budgeting?
a) Link budget decisions to results and outcomes
b) Engage and stimulate effective communication with stakeholders
c) Link to broad organizational goals
d) All of the above - ANSWER d) All of the above
Which of the following is a true statement about the advantages of line-item
budgeting?
a) It obscures tradeoffs
b) It is easy to understand
c) It is effective at reducing waste
d) It is focused on results - ANSWER b) It is easy to understand
Which of the following is an advantage of placing the budget function under the
chief executive?
a) Greater coordination with the finance function
b) More participation in day-to-day crises
c) Staff with more financial expertise
d) None of the above - ANSWER d) None of the above
, When developing program goals, which of the
following should be the major consideration?
a) The needed service level(s)
b) The likelihood of the program's budget
request being approved
c) The findings from citizen surveys
d) The level of resources needed - ANSWER a) The needed service level(s)
A well-designed and properly used budget classification format:
a) embeds direct link to chart of accounts
b) must be concise and restricted to fund, organizational unit, and activity,
c) must contain information about the programmatic nature of the proposed
expenditure
d) provides information in a format and at a level of detail to enable budgetary
analysis and decision making - ANSWER A well-thought-of and well-
implemented budget classification structure:
d) provides information in a form and sufficient level of detail to permit budget
analysis and decision-making
The National Advisory Council on State and Local Government Budgeting
included a principle titled, "Establish a Budget That Is Linked to Strategies to
Achieve Goals." Which one of the following is not supposed to be
accomplished when linkage is made in the budget?
a) Long-term planning is done.
b) The effects of changes to the revenue sources' rates and bases are taken into
consideration.
c) Develop a capital improvement plan
BUDGETING SAMPLE EXAM QUESTIONS
AND ANSWERS
Which of the following is a necessary ingredient of a good budget process
according to the National Advisory Council on State and Local Budgeting?
a) Link budget decisions to results and outcomes
b) Engage and stimulate effective communication with stakeholders
c) Link to broad organizational goals
d) All of the above - ANSWER d) All of the above
Which of the following is a true statement about the advantages of line-item
budgeting?
a) It obscures tradeoffs
b) It is easy to understand
c) It is effective at reducing waste
d) It is focused on results - ANSWER b) It is easy to understand
Which of the following is an advantage of placing the budget function under the
chief executive?
a) Greater coordination with the finance function
b) More participation in day-to-day crises
c) Staff with more financial expertise
d) None of the above - ANSWER d) None of the above
, When developing program goals, which of the
following should be the major consideration?
a) The needed service level(s)
b) The likelihood of the program's budget
request being approved
c) The findings from citizen surveys
d) The level of resources needed - ANSWER a) The needed service level(s)
A well-designed and properly used budget classification format:
a) embeds direct link to chart of accounts
b) must be concise and restricted to fund, organizational unit, and activity,
c) must contain information about the programmatic nature of the proposed
expenditure
d) provides information in a format and at a level of detail to enable budgetary
analysis and decision making - ANSWER A well-thought-of and well-
implemented budget classification structure:
d) provides information in a form and sufficient level of detail to permit budget
analysis and decision-making
The National Advisory Council on State and Local Government Budgeting
included a principle titled, "Establish a Budget That Is Linked to Strategies to
Achieve Goals." Which one of the following is not supposed to be
accomplished when linkage is made in the budget?
a) Long-term planning is done.
b) The effects of changes to the revenue sources' rates and bases are taken into
consideration.
c) Develop a capital improvement plan
