CGFM STUDY TEST QUESTIONS WITH
100% CORRECT ANSWERS
What is benchmarking? - Answer- Measuring performance against established
standards or best practices.
What is a public-private partnership (PPP)? - Answer- Collaboration between a
government agency and private-sector companies to fund and operate projects.
What is federal revenue sharing? - Answer- The distribution of federal tax revenues to
state and local governments.
Explain cost-benefit analysis. - Answer- A systematic approach to estimate the
strengths and weaknesses of alternatives.
What are fiduciary funds? - Answer- Funds held by the government in a trustee capacity
for others.
Define operating budgeting. - Answer- Budgeting for ongoing government operations
and day-to-day expenses.
What is economic stabilization? - Answer- Government policies aimed at reducing
economic fluctuations.
What does debt service refer to? - Answer- The payment of interest and principal on
debt.
Describe treasury management. - Answer- Managing cash flows, investments, and
assets for government operations.
What is an agency fund? - Answer- A fund used by the government to hold resources
for others.
What is the GAAP hierarchy? - Answer- A framework for applying accounting principles
in government.
Define fund balance. - Answer- The difference between a government's assets and
liabilities.
, What is cash basis accounting? - Answer- Recording revenue and expenses only when
cash transactions occur.
Explain modified accrual accounting. - Answer- Combining elements of cash basis and
accrual basis accounting, often used in government funds.
What are 'Special Revenue Funds'? - Answer- Funds used for specific purposes as
designated by law.
What are enterprise funds? - Answer- Funds for government operations financed
through user fees and charges.
What is the purpose of multi-year budgeting? - Answer- Planning and managing
finances across multiple fiscal years to ensure long-term goals.
Describe cost accounting in the government. - Answer- Tracking costs associated with
services and projects for budgeting and management.
What are cost allocation methods? - Answer- Techniques to distribute costs across
different departments or services for accurate accounting.
What are general obligation bonds? - Answer- Bonds backed by the full faith and credit
of the issuing government.
What does CGFM stand for? - Answer- Certified Government Financial Manager
What are the three core sections of the CGFM exam? - Answer- Governmental
Environment, Governmental Accounting, Financial Reporting and Budgeting, and
Governmental Financial Management and Control
What is the primary role of the Government Accountability Office (GAO)? - Answer-
Auditing and evaluating federal government operations to ensure efficiency,
effectiveness, and accountability.
What legislation established the GAO? - Answer- Budget and Accounting Act of 1921
What is the purpose of the Federal Managers' Financial Integrity Act (FMFIA)? -
Answer- To require federal agencies to implement and evaluate internal control
systems.
What are internal controls in the context of government finance? - Answer- Processes
and procedures designed to ensure financial integrity, accuracy, efficiency, and
compliance.
100% CORRECT ANSWERS
What is benchmarking? - Answer- Measuring performance against established
standards or best practices.
What is a public-private partnership (PPP)? - Answer- Collaboration between a
government agency and private-sector companies to fund and operate projects.
What is federal revenue sharing? - Answer- The distribution of federal tax revenues to
state and local governments.
Explain cost-benefit analysis. - Answer- A systematic approach to estimate the
strengths and weaknesses of alternatives.
What are fiduciary funds? - Answer- Funds held by the government in a trustee capacity
for others.
Define operating budgeting. - Answer- Budgeting for ongoing government operations
and day-to-day expenses.
What is economic stabilization? - Answer- Government policies aimed at reducing
economic fluctuations.
What does debt service refer to? - Answer- The payment of interest and principal on
debt.
Describe treasury management. - Answer- Managing cash flows, investments, and
assets for government operations.
What is an agency fund? - Answer- A fund used by the government to hold resources
for others.
What is the GAAP hierarchy? - Answer- A framework for applying accounting principles
in government.
Define fund balance. - Answer- The difference between a government's assets and
liabilities.
, What is cash basis accounting? - Answer- Recording revenue and expenses only when
cash transactions occur.
Explain modified accrual accounting. - Answer- Combining elements of cash basis and
accrual basis accounting, often used in government funds.
What are 'Special Revenue Funds'? - Answer- Funds used for specific purposes as
designated by law.
What are enterprise funds? - Answer- Funds for government operations financed
through user fees and charges.
What is the purpose of multi-year budgeting? - Answer- Planning and managing
finances across multiple fiscal years to ensure long-term goals.
Describe cost accounting in the government. - Answer- Tracking costs associated with
services and projects for budgeting and management.
What are cost allocation methods? - Answer- Techniques to distribute costs across
different departments or services for accurate accounting.
What are general obligation bonds? - Answer- Bonds backed by the full faith and credit
of the issuing government.
What does CGFM stand for? - Answer- Certified Government Financial Manager
What are the three core sections of the CGFM exam? - Answer- Governmental
Environment, Governmental Accounting, Financial Reporting and Budgeting, and
Governmental Financial Management and Control
What is the primary role of the Government Accountability Office (GAO)? - Answer-
Auditing and evaluating federal government operations to ensure efficiency,
effectiveness, and accountability.
What legislation established the GAO? - Answer- Budget and Accounting Act of 1921
What is the purpose of the Federal Managers' Financial Integrity Act (FMFIA)? -
Answer- To require federal agencies to implement and evaluate internal control
systems.
What are internal controls in the context of government finance? - Answer- Processes
and procedures designed to ensure financial integrity, accuracy, efficiency, and
compliance.
