AGA CGFM Exam test preparation Questions and Must have
solutions Updated version 2024/2025
Present Value Formula - correct answer PV=FV/(1+r)^n
Future Value Formula - correct answer FV=PV(1+r)^n
Liquidity Ratios - correct answer Current Ratio (Assets/Liabilities)
Quick Ratio (Assets - Inventory/ Liabilities)
Receivables Ratios - correct answer Percent of Taxes Collected
(collections/levy)
Days Receivables Outstanding
Inventory Ratios - correct answer Inventory turnover (revenue from sale of
inventory/average inventory)
Average age of inventory (365/inventory turnover)
Operating Results and Budgetary Cushion Ratios - correct answer
Revenues/Expenditures (Expenditures covered by revenues)
Excess Revenue over Expenditures/Revenues (ability to generate a surplus or
net income)
Unassigned Fund Balance/Annual Revenue (size of budgetary cushion)
Debt Burden and Financial Flexibility Ratios - correct answer Outstanding
Long Term Debt/Population
Outstanding Long Term Debt/Assessed Value of Taxable Property
Total Debt Service/Total Revenue
, Excess Revenue Over Operating Expenses/Principal Payment + Interest
Expense
Pension Fund Assets Available/Pension Benefit Obligation
Budget and Accounting Procedures Act of 1950 - correct answer Federal
Agency heads must establish internal controls
Federal Managers' Financial Integrity Act of 1982 (FMFIA) - correct answer
GAO to prescribe internal control standards and OMB to establish guidelines
Internal controls evaluated annually
Single Audit Act - correct answer Requires audits of state, local, and non profit
receiving federal assistance
CFO Act of 1990 - correct answer Requires an integrated agency accounting
and financial management system
Piloted at 10 agencies
Government Management Reform Act of (1994) - correct answer Expanded
CFO Act to 24 agencies and mandated an audited annual consolidated financial
statement for the Executive Branch
Federal Financial Management Improvement Act of 1996 - correct answer
Requires agencies to follow federal accounting standards, financial management
system requirements, and Treasury standards
SOX - correct answer Internal controls assessed during financial reporting
Accountability of Tax Dollars Act of 2002 - correct answer Annual audit for
virtually all agencies
solutions Updated version 2024/2025
Present Value Formula - correct answer PV=FV/(1+r)^n
Future Value Formula - correct answer FV=PV(1+r)^n
Liquidity Ratios - correct answer Current Ratio (Assets/Liabilities)
Quick Ratio (Assets - Inventory/ Liabilities)
Receivables Ratios - correct answer Percent of Taxes Collected
(collections/levy)
Days Receivables Outstanding
Inventory Ratios - correct answer Inventory turnover (revenue from sale of
inventory/average inventory)
Average age of inventory (365/inventory turnover)
Operating Results and Budgetary Cushion Ratios - correct answer
Revenues/Expenditures (Expenditures covered by revenues)
Excess Revenue over Expenditures/Revenues (ability to generate a surplus or
net income)
Unassigned Fund Balance/Annual Revenue (size of budgetary cushion)
Debt Burden and Financial Flexibility Ratios - correct answer Outstanding
Long Term Debt/Population
Outstanding Long Term Debt/Assessed Value of Taxable Property
Total Debt Service/Total Revenue
, Excess Revenue Over Operating Expenses/Principal Payment + Interest
Expense
Pension Fund Assets Available/Pension Benefit Obligation
Budget and Accounting Procedures Act of 1950 - correct answer Federal
Agency heads must establish internal controls
Federal Managers' Financial Integrity Act of 1982 (FMFIA) - correct answer
GAO to prescribe internal control standards and OMB to establish guidelines
Internal controls evaluated annually
Single Audit Act - correct answer Requires audits of state, local, and non profit
receiving federal assistance
CFO Act of 1990 - correct answer Requires an integrated agency accounting
and financial management system
Piloted at 10 agencies
Government Management Reform Act of (1994) - correct answer Expanded
CFO Act to 24 agencies and mandated an audited annual consolidated financial
statement for the Executive Branch
Federal Financial Management Improvement Act of 1996 - correct answer
Requires agencies to follow federal accounting standards, financial management
system requirements, and Treasury standards
SOX - correct answer Internal controls assessed during financial reporting
Accountability of Tax Dollars Act of 2002 - correct answer Annual audit for
virtually all agencies
