CGFM Test 2 Exam Questions &
Answers (Grade A+)
Governments exist to provide services -
correct answer ✅no profit motive, no single measure of success
Primary funding source = -
correct answer ✅taxes (involuntary payments, because there is no
ability to match services to those who provide the resource)
Budget process = -
correct answer ✅primary control device in government
US Constitution provides two levels of government -
correct answer ✅Federal and State
State consitituions similar in that each defines the excutive and
legislative braches, establishes political offices, and defines how
local governments can be formed.
Government Accountability -
correct answer ✅based on the belief that the government has a
responsibility to report, the public has a right to know, andthe
ultimate power belongs to the people.
,CGFM Test 2 Exam Questions &
Answers (Grade A+)
1) Legal Accountability -
correct answer ✅public officials are accountable for the
extablishment of controls to ensure that transations are processed
properly
2) Performance Accountability -
correct answer ✅acting in an efficient, effective, or economic
manner.
3) Fiscal Accountability -
correct answer ✅raising and allocation of resources to accomplish
objectives
4) Operational Accountability -
correct answer ✅stewardship of public resources
Which branch is accountable to whom? -
correct answer ✅Legislative --> to the public
Executive --> to legislative and public as well as other governments
,CGFM Test 2 Exam Questions &
Answers (Grade A+)
Interperiod Equity -
correct answer ✅current generation of citizens should not be able
to shift the burden of paying for current-year services to future
taxpayers
balanced budget law = current year services must be financed with
current year revenues (problem is financial data can be
manipulated to achieve this). Fed Gov't not subject to this.
Laws prohibiting borrowing -
correct answer ✅* only to meet cash flow needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports -
correct answer ✅1) Legislators and oversight groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
6) Employees and employee organizations
, CGFM Test 2 Exam Questions &
Answers (Grade A+)
Need for financial reports -
correct answer ✅1) primary communication device for assessing
accountability
2) aid in decision making process (economic, social, and political)
* planning and administration
* results of operations
* financial condition of the organization
Point in time financial reports -
correct answer ✅provides current information as of the date of
the reports (e.g. balance sheet)
Period financial reports -
correct answer ✅reports the activity for an entire fiscal period
(month, year)
General Purpose External Financial Reports (GPEFR)/CAFR -
correct answer ✅1) audited financial statements (including notes)
"basic financial statements" - state/local
Answers (Grade A+)
Governments exist to provide services -
correct answer ✅no profit motive, no single measure of success
Primary funding source = -
correct answer ✅taxes (involuntary payments, because there is no
ability to match services to those who provide the resource)
Budget process = -
correct answer ✅primary control device in government
US Constitution provides two levels of government -
correct answer ✅Federal and State
State consitituions similar in that each defines the excutive and
legislative braches, establishes political offices, and defines how
local governments can be formed.
Government Accountability -
correct answer ✅based on the belief that the government has a
responsibility to report, the public has a right to know, andthe
ultimate power belongs to the people.
,CGFM Test 2 Exam Questions &
Answers (Grade A+)
1) Legal Accountability -
correct answer ✅public officials are accountable for the
extablishment of controls to ensure that transations are processed
properly
2) Performance Accountability -
correct answer ✅acting in an efficient, effective, or economic
manner.
3) Fiscal Accountability -
correct answer ✅raising and allocation of resources to accomplish
objectives
4) Operational Accountability -
correct answer ✅stewardship of public resources
Which branch is accountable to whom? -
correct answer ✅Legislative --> to the public
Executive --> to legislative and public as well as other governments
,CGFM Test 2 Exam Questions &
Answers (Grade A+)
Interperiod Equity -
correct answer ✅current generation of citizens should not be able
to shift the burden of paying for current-year services to future
taxpayers
balanced budget law = current year services must be financed with
current year revenues (problem is financial data can be
manipulated to achieve this). Fed Gov't not subject to this.
Laws prohibiting borrowing -
correct answer ✅* only to meet cash flow needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports -
correct answer ✅1) Legislators and oversight groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
6) Employees and employee organizations
, CGFM Test 2 Exam Questions &
Answers (Grade A+)
Need for financial reports -
correct answer ✅1) primary communication device for assessing
accountability
2) aid in decision making process (economic, social, and political)
* planning and administration
* results of operations
* financial condition of the organization
Point in time financial reports -
correct answer ✅provides current information as of the date of
the reports (e.g. balance sheet)
Period financial reports -
correct answer ✅reports the activity for an entire fiscal period
(month, year)
General Purpose External Financial Reports (GPEFR)/CAFR -
correct answer ✅1) audited financial statements (including notes)
"basic financial statements" - state/local
