CGFM Exam 2 UPDATED ACTUAL Exam
Questions and CORRECT Answers
Special assessments are used to ensure that - CORRECT ANSWER - individuals benefiting
from the project are the ones who will pay for it
imputed costs - CORRECT ANSWER - costs incurred by a federal entity for goods and
services provided and paid for in total, or in part, by other federal entities
Accumulated Depreciation is which type of account - CORRECT ANSWER - contra asset
Preferred Costing Methodology - CORRECT ANSWER - Directly tracing costs wherever
feasible and economically practical
due process document describing various methods of accounting for a transaction and asks
respondents to provide their views on the preferred method - CORRECT ANSWER -
discussion memorandum
What is the 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.
GASB, FASB, and FASAB have been designated standard-setting bodies for accounting and
reporting standards by the - CORRECT ANSWER - AICPA
Federal appropriations provide a legal authority for undertaking programs, allocating resources,
and - CORRECT ANSWER - expending funds
Federal appropriations law can be categorized into which three topical areas? - CORRECT
ANSWER - Purpose, time, and amount (PTA)
,What are the basic types of budget authority used in the Federal Government? (6) - CORRECT
ANSWER - 1. Appropriations
2. Contract Authority
3. Borrowing Authority
4. Monetary Credits
5. Offsetting Collections and Receipts
6. Loan and Loan Guarantee Authority
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.
Budgeting is an element of which policy? - CORRECT ANSWER - fiscal
Another term for the federal government baseline budget is - CORRECT ANSWER -a
current level of service budget.
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 - CORRECT ANSWER -
citizens, Congress, executives, and program managers.
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.
Street resurfacing is a type of which budget element? - CORRECT ANSWER - program
Which of the following sources of accounting principles is at the top of the GASB hierarchy? -
CORRECT ANSWER - Generally Accepted Accounting Principles
, 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.
Non-exchange revenue includes inflows of resources arising from - CORRECT ANSWER -
taxes, fines and penalties from the private sector.
A group of activities within a function are known as - CORRECT ANSWER - a program
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
Which of the following terms describes costs an agency incurs on behalf of another agency? -
CORRECT ANSWER - inter-entity
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
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.
Apportionments and allotments are used by agencies to ensure - CORRECT ANSWER - that
outlays do not exceed appropriations.
Departments and agencies submit their apportionment requests for future expenditures during
which budget phase? - CORRECT ANSWER - execution
Which element of the budget structure is represented by license and permit revenue? -
CORRECT ANSWER - category or source
Questions and CORRECT Answers
Special assessments are used to ensure that - CORRECT ANSWER - individuals benefiting
from the project are the ones who will pay for it
imputed costs - CORRECT ANSWER - costs incurred by a federal entity for goods and
services provided and paid for in total, or in part, by other federal entities
Accumulated Depreciation is which type of account - CORRECT ANSWER - contra asset
Preferred Costing Methodology - CORRECT ANSWER - Directly tracing costs wherever
feasible and economically practical
due process document describing various methods of accounting for a transaction and asks
respondents to provide their views on the preferred method - CORRECT ANSWER -
discussion memorandum
What is the 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.
GASB, FASB, and FASAB have been designated standard-setting bodies for accounting and
reporting standards by the - CORRECT ANSWER - AICPA
Federal appropriations provide a legal authority for undertaking programs, allocating resources,
and - CORRECT ANSWER - expending funds
Federal appropriations law can be categorized into which three topical areas? - CORRECT
ANSWER - Purpose, time, and amount (PTA)
,What are the basic types of budget authority used in the Federal Government? (6) - CORRECT
ANSWER - 1. Appropriations
2. Contract Authority
3. Borrowing Authority
4. Monetary Credits
5. Offsetting Collections and Receipts
6. Loan and Loan Guarantee Authority
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.
Budgeting is an element of which policy? - CORRECT ANSWER - fiscal
Another term for the federal government baseline budget is - CORRECT ANSWER -a
current level of service budget.
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 - CORRECT ANSWER -
citizens, Congress, executives, and program managers.
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.
Street resurfacing is a type of which budget element? - CORRECT ANSWER - program
Which of the following sources of accounting principles is at the top of the GASB hierarchy? -
CORRECT ANSWER - Generally Accepted Accounting Principles
, 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.
Non-exchange revenue includes inflows of resources arising from - CORRECT ANSWER -
taxes, fines and penalties from the private sector.
A group of activities within a function are known as - CORRECT ANSWER - a program
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
Which of the following terms describes costs an agency incurs on behalf of another agency? -
CORRECT ANSWER - inter-entity
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
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.
Apportionments and allotments are used by agencies to ensure - CORRECT ANSWER - that
outlays do not exceed appropriations.
Departments and agencies submit their apportionment requests for future expenditures during
which budget phase? - CORRECT ANSWER - execution
Which element of the budget structure is represented by license and permit revenue? -
CORRECT ANSWER - category or source
