2025 CFO FINAL EXAM ALL COURSE RELIABLE QUESTIONS WITH
ANSWERS 2025/2026 GRADED A+
cash management plan - individual to municipality, outlines type of investments that
may be used
Idle funds - must be invested in interest bearing account
cash flow analysis - provides the CFO with a tool to make decisions as to investing idle
funds and to make sure the funds are available for disbursement when the need arises
investment vehicles - bonds or obligations of USA, money market mutual funds,
obligations of federal agency, bonds or obligations of the local unit or school districts,
bonds with maturity date within 397 days, local government investment pools, State of
NJ cash management fund
change funds - small quantity of currency may be kept on hand at the start of business
day to make change
books of original entry - cash receipts journal, cash disbursements journal, general
journal, payroll journal
Cash Receipts Journal - records all cash taken in
Cash Disbursements journal - records all cash that goes out
General Journal - initial recording of accounting transactions not recorded in other
books need full explanation open accounts at beginning of accounting period post temp.
& adopted budgets, close rev & expense accounts, adjust or correct transactions,
record non-cash transactions
FCOA - Flexible chart of accounts
XX-XXX-XX-XXX-XXX
Fund-General Ledger/trial balance-NJCAFR code(budget category)- subsidiary
accounts for rev/app. reporting- detail line items (S&W v. OE)
Reserve for encumbrances - equal to the total of all encumbrances balance sheet
liability and cash liability
Appropriations ledger - provides a budget trial balance
Budget Adoption - must be adopted by the majority of the full membership of the
governing body and 2 certified copies must be filed with the division and 1 certified copy
must be filed with the county board of taxation
3 year special emergencies - damage to roads or bridges by snow ice frost or floods,
public exigencies caused by civil disturbances
,5 year special emergencies - prep. of an approved tax map, revaluation of real property,
codification of ordinances, engagement of consultants in preparing a master plan, prep
of drainage maps for flood control, preliminary engineering for sanitary sewer system,
consolidation commission, severance liabilities, prep. of sanitary or storm sewer system
map
Ad Valorum Tax - that each taxpayer shares in the total tax burden of the town in the
direct proportion to the value that his/her property bears to the total value of all the
property in town
180 days - Annual audit must be filed within ______ of the close of the fiscal year
1977 CAP Law - (Appropriations CAP) The law limits the amount of increase in
appropriations from year to year to 2.5% of the previous year's final appropriations or
the municipal price deflator index, whichever is less. The Director must promulgate the
Cost of Living Adjustment
Budget - financial plan involving the estimate of expenditures and the proposed method
of financing these expenditures through revenue sources.
10 days - budget must be published at least ________ prior to the public hearing
28 days - public hearing must be at least ___________ after introduction/approval
March 20 - statutory date to adopt the budget without special permission from the
Director of DLGS
last 2 months - current year budget appropriation transfers are permitted during the
first 3 months - reserve year budget transfers are permitted
CAP Banking - a municipality may by ordinance or a county by resolution increase the
COLA percentage up to 3.5% or bank for up to two years, the difference between its
final appropriation subject to the CAP and 3.5% CAP Banking is not automatic
Capital Notes - may be issued in an a aggregate amount not exceeding the lesser of
$200,000 or 1/2 of 1% of the equalized assessed valuation basis. They must be repaid
within 5 years of issue. No less than 1/5th of notes must be budgeted for each year
Chapter 78 - heath care contributions required by state employees on an increasing
scale subject to the salary
Debt Service - includes the payment of principal and interest on notes as well as federal
and state loans and improvement authority leases
,contingent expenses - Budget Law allows an appropriation for these in an amount not
more than 3% of the total appropriations for operating purposes
Dedication by Rider - a request to the Director to approve in the budget dedicated
revenues anticipated to be receiving during the year, which are not subject to a
reasonably accurate estimate in advance
DLGS Components - Bureau of Financial Regulation, Bureau of Local Management
Services, Bureau of Authority Regulation, Office of Local Government Research, Local
Finance Board
February 10 - the AFS must be certified and filed by
budget must be introduced by:
Flexible Chart of Accounts - categorized budget appropriations and revenues in a
coding system
Budget amendments - budget may be amended at anytime prior to adoption without
advertisement unless add new item of appropriation in excess of 1% of total of
appropriations, inc/dec any item by more than 10%, inc the amount to be raised by
more than 5% unless for emergency, if these happen then the amendment requires a
public hearing and publication 3 days prior
5 years - minimum useful life of capital items
2010 CAP Law - (Levy CAP) imposes a 2$ cap on the increase of local government tax
levies subject to limited exceptions
NJSA 40A:4 - local budget law
NJ Law - Title: Chapter-Section. Subsection
NJSA 40:4-85 - (Change in Text and title regulation) the director may make such
correction of the title text or amount of any item of appropriation appearing in the
adopted budget only as shall be necessary to make said item of appropriation available
for the specific purpose or purposes required by the local unit
NJSA 40:4-87 - (Chapter 159 method) the director may approve the insertion of any
special item of revenue such as grant funds in the budget of any local unit when such
item shall have been made available by law and the amount thereof shall not have been
determined prior to the adoption of the budget
Office of Local Government Research - provides local government units with assistance
on information technology issues and state aid calculations
, Budget introduction - 3 copies must be filed with the Director within 3 days following the
introduction
line item budget - type of budget that must be adopted by local governments, includes
line item appropriations for each department or operation
2 times - payment of bond interest each year
1 time - payment of bond principal each year
Self Examination - budget approval by the state of NJ establishes a 3 year rotating
comprehensive review process by the Division so 2 years on self 1 year reviewed
Statutory Expenditures - include payments due to the various state pension systems,
unemployment compensation, disability insurance, FICA
Bureau of Authority Regulation - supervises local public authorities and special districts
on matters relating to budgeting accounting and financial reporting, reviews authority
contracts for privatization of services such as water supply waste treatment and
resource recovery
TAD 85-1 - Encumbrance Accounting System
TAD 85-2 - Requires a fixed assets ledger and recording system
temporary budget - adopted within first 30 days of the year, can be up to 26.25% of prior
years budget less public assistance capital improvement fund and debt service
Transitional year budget - when municipalities switched to SFY needed to adopt this
budget to account for the expenditures from Jan 1-June 30, the towns were allowed to
issue FYABS (fiscal year adjustment bonds) to finance the 6 months
Type 1 school - school board members are appointed by the mayor and the final budget
approval is granted by a board of school estimate, debt is part of the municipal capital
fund
Board of School Estimate - comprised of the mayor two members of the governing body
and two members of the board of education
Bureau of Financial Regulation - provides fiscal oversight and essential services to
municipal and county governments
Bureau of Local Management Services - provides local governments with advisory and
technical assistance on a variety of subjects and financial aid through several state
budgeted programs
ANSWERS 2025/2026 GRADED A+
cash management plan - individual to municipality, outlines type of investments that
may be used
Idle funds - must be invested in interest bearing account
cash flow analysis - provides the CFO with a tool to make decisions as to investing idle
funds and to make sure the funds are available for disbursement when the need arises
investment vehicles - bonds or obligations of USA, money market mutual funds,
obligations of federal agency, bonds or obligations of the local unit or school districts,
bonds with maturity date within 397 days, local government investment pools, State of
NJ cash management fund
change funds - small quantity of currency may be kept on hand at the start of business
day to make change
books of original entry - cash receipts journal, cash disbursements journal, general
journal, payroll journal
Cash Receipts Journal - records all cash taken in
Cash Disbursements journal - records all cash that goes out
General Journal - initial recording of accounting transactions not recorded in other
books need full explanation open accounts at beginning of accounting period post temp.
& adopted budgets, close rev & expense accounts, adjust or correct transactions,
record non-cash transactions
FCOA - Flexible chart of accounts
XX-XXX-XX-XXX-XXX
Fund-General Ledger/trial balance-NJCAFR code(budget category)- subsidiary
accounts for rev/app. reporting- detail line items (S&W v. OE)
Reserve for encumbrances - equal to the total of all encumbrances balance sheet
liability and cash liability
Appropriations ledger - provides a budget trial balance
Budget Adoption - must be adopted by the majority of the full membership of the
governing body and 2 certified copies must be filed with the division and 1 certified copy
must be filed with the county board of taxation
3 year special emergencies - damage to roads or bridges by snow ice frost or floods,
public exigencies caused by civil disturbances
,5 year special emergencies - prep. of an approved tax map, revaluation of real property,
codification of ordinances, engagement of consultants in preparing a master plan, prep
of drainage maps for flood control, preliminary engineering for sanitary sewer system,
consolidation commission, severance liabilities, prep. of sanitary or storm sewer system
map
Ad Valorum Tax - that each taxpayer shares in the total tax burden of the town in the
direct proportion to the value that his/her property bears to the total value of all the
property in town
180 days - Annual audit must be filed within ______ of the close of the fiscal year
1977 CAP Law - (Appropriations CAP) The law limits the amount of increase in
appropriations from year to year to 2.5% of the previous year's final appropriations or
the municipal price deflator index, whichever is less. The Director must promulgate the
Cost of Living Adjustment
Budget - financial plan involving the estimate of expenditures and the proposed method
of financing these expenditures through revenue sources.
10 days - budget must be published at least ________ prior to the public hearing
28 days - public hearing must be at least ___________ after introduction/approval
March 20 - statutory date to adopt the budget without special permission from the
Director of DLGS
last 2 months - current year budget appropriation transfers are permitted during the
first 3 months - reserve year budget transfers are permitted
CAP Banking - a municipality may by ordinance or a county by resolution increase the
COLA percentage up to 3.5% or bank for up to two years, the difference between its
final appropriation subject to the CAP and 3.5% CAP Banking is not automatic
Capital Notes - may be issued in an a aggregate amount not exceeding the lesser of
$200,000 or 1/2 of 1% of the equalized assessed valuation basis. They must be repaid
within 5 years of issue. No less than 1/5th of notes must be budgeted for each year
Chapter 78 - heath care contributions required by state employees on an increasing
scale subject to the salary
Debt Service - includes the payment of principal and interest on notes as well as federal
and state loans and improvement authority leases
,contingent expenses - Budget Law allows an appropriation for these in an amount not
more than 3% of the total appropriations for operating purposes
Dedication by Rider - a request to the Director to approve in the budget dedicated
revenues anticipated to be receiving during the year, which are not subject to a
reasonably accurate estimate in advance
DLGS Components - Bureau of Financial Regulation, Bureau of Local Management
Services, Bureau of Authority Regulation, Office of Local Government Research, Local
Finance Board
February 10 - the AFS must be certified and filed by
budget must be introduced by:
Flexible Chart of Accounts - categorized budget appropriations and revenues in a
coding system
Budget amendments - budget may be amended at anytime prior to adoption without
advertisement unless add new item of appropriation in excess of 1% of total of
appropriations, inc/dec any item by more than 10%, inc the amount to be raised by
more than 5% unless for emergency, if these happen then the amendment requires a
public hearing and publication 3 days prior
5 years - minimum useful life of capital items
2010 CAP Law - (Levy CAP) imposes a 2$ cap on the increase of local government tax
levies subject to limited exceptions
NJSA 40A:4 - local budget law
NJ Law - Title: Chapter-Section. Subsection
NJSA 40:4-85 - (Change in Text and title regulation) the director may make such
correction of the title text or amount of any item of appropriation appearing in the
adopted budget only as shall be necessary to make said item of appropriation available
for the specific purpose or purposes required by the local unit
NJSA 40:4-87 - (Chapter 159 method) the director may approve the insertion of any
special item of revenue such as grant funds in the budget of any local unit when such
item shall have been made available by law and the amount thereof shall not have been
determined prior to the adoption of the budget
Office of Local Government Research - provides local government units with assistance
on information technology issues and state aid calculations
, Budget introduction - 3 copies must be filed with the Director within 3 days following the
introduction
line item budget - type of budget that must be adopted by local governments, includes
line item appropriations for each department or operation
2 times - payment of bond interest each year
1 time - payment of bond principal each year
Self Examination - budget approval by the state of NJ establishes a 3 year rotating
comprehensive review process by the Division so 2 years on self 1 year reviewed
Statutory Expenditures - include payments due to the various state pension systems,
unemployment compensation, disability insurance, FICA
Bureau of Authority Regulation - supervises local public authorities and special districts
on matters relating to budgeting accounting and financial reporting, reviews authority
contracts for privatization of services such as water supply waste treatment and
resource recovery
TAD 85-1 - Encumbrance Accounting System
TAD 85-2 - Requires a fixed assets ledger and recording system
temporary budget - adopted within first 30 days of the year, can be up to 26.25% of prior
years budget less public assistance capital improvement fund and debt service
Transitional year budget - when municipalities switched to SFY needed to adopt this
budget to account for the expenditures from Jan 1-June 30, the towns were allowed to
issue FYABS (fiscal year adjustment bonds) to finance the 6 months
Type 1 school - school board members are appointed by the mayor and the final budget
approval is granted by a board of school estimate, debt is part of the municipal capital
fund
Board of School Estimate - comprised of the mayor two members of the governing body
and two members of the board of education
Bureau of Financial Regulation - provides fiscal oversight and essential services to
municipal and county governments
Bureau of Local Management Services - provides local governments with advisory and
technical assistance on a variety of subjects and financial aid through several state
budgeted programs
