CGFM CORE EXAM TEST 2026 QUESTIONS AND SOLUTIONS
GRADED A+
✔✔I 51.An entity operates a program with the costs shown on the left. The total cost
allocable to the federal award is - ✔✔Correct Answer: $104,500.
✔✔I 52.In government reporting, how is a Homeless Initiative classified? - ✔✔Correct
Answer: program
✔✔I 53.A governmental entity is determining the user fee to be assessed for renting a
cabin at a state park. Annual costs associated with operating the campsite are as
shown on the left. The campsite has 10 cabins and expects each to be rented for 26
weeks, per year. Based on this information, the weekly user fee needed to break even
for the fiscal year is - ✔✔Correct Answer: $692.31.
✔✔I 54.All of the following are general criteria that a cost must meet to be allowable
under an intergovernmental cost-reimbursement contract or grant EXCEPT that the cost
must be - ✔✔Correct Answer: used to meet the matching requirement of another award.
✔✔I 55.The Digital Accountability and Transparency Act combines which two pieces of
financial data to improve open reporting of government financial information? -
✔✔Correct Answer: data standards and an on-line data exchange
✔✔I 56.Which of the following would be affected by both the measurement focus and
the basis of accounting? - ✔✔Correct Answer: a transaction involving legal and other
claims
✔✔I 57.Governments use cost accounting information to - ✔✔Correct Answer: monitor
and improve program economy, receive cost reimbursements, establish user fees and
identify efficiencies.
✔✔I 58.Which objective of federal financial reporting is exemplified by the statement
that "Federal financial reporting should help the reader determine whether future
budgetary resources will likely be sufficient to sustain public services and to meet
obligations as they become due."? - ✔✔Correct Answer: stewardship
✔✔I 59.If a proposed standard is moving through the due process phases of approval
for the GASB, FASB, and FASAB Standards, what is the final process document that is
published before the final standard is issued? - ✔✔Correct Answer: exposure draft
✔✔I 60.The objective of the current financial resources measurement focus is to -
✔✔Correct Answer: determine if there are sufficient current financial resources
available to pay for goods and services.
, ✔✔I 61.All of the following are requirements of FASAB SFFAS 4: Managerial Cost
Accounting Concepts and Standards EXCEPT that - ✔✔Correct Answer: each reporting
entity should accumulate and report the costs of its activities on a regular basis for
financial statement purposes.
✔✔I 62.A state agency receives two federal grants to provide support for incoming
refugees. Grant A covers staffing costs only and is required to be used before staffing
costs can be covered under Grant B. Grant B does not restrict activities as long as it
relates to the resettlement of refugees. Per federal rules, all costs are required to be
matched with 25% non-federal funds. The state's refugee program has strict rules,
requiring any private donations to be used first, and making it unallowable for state
funding to be spent on purchasing household items. The agency has the activity shown
on the left. Based on the OMB Uniform Guidance, what is the total cost allowed to be
charged to Grant B? - ✔✔Correct Answer: $264,375
✔✔I 63.When determining costs to recover through a user fee, expenses associated
with the salary of the program manager are considered - ✔✔Correct Answer: a direct
cost.
✔✔I 64.Accumulated depreciation is recorded in which type of account? - ✔✔Correct
Answer: contra-asset
✔✔I 65.Organizations that are legally-separate, tax-exempt entities, should be
discretely presented as component units if all of the following criteria are met EXCEPT -
✔✔Correct Answer: the separately elected governing body determines the economic
resources received or held without the primary government's substantive authority to
approve and modify the budget.
✔✔I 66.The GASB members are appointed by the - ✔✔Correct Answer: Financial
Accounting Foundation.
✔✔I 67.What factors should be considered when determining the amount of
depreciation to record? - ✔✔Correct Answer: historical cost, depreciable life and
salvage value
✔✔I 68.Which of the following is an example of interperiod equity? - ✔✔Correct Answer:
issuing a 30-year serial bond to finance the construction of a recreation center
✔✔I 69.The county recorder's office sells hunting licenses, which are valid for one
season. Licenses have been sold from this office for the past 20 years and have seen
relatively stable growth. To forecast sales in the upcoming year, the recorder reviews
receipts for the previous three years and adjusts for the increase in the license fee. This
method of forecasting revenues is called - ✔✔Correct Answer: trend analysis.
GRADED A+
✔✔I 51.An entity operates a program with the costs shown on the left. The total cost
allocable to the federal award is - ✔✔Correct Answer: $104,500.
✔✔I 52.In government reporting, how is a Homeless Initiative classified? - ✔✔Correct
Answer: program
✔✔I 53.A governmental entity is determining the user fee to be assessed for renting a
cabin at a state park. Annual costs associated with operating the campsite are as
shown on the left. The campsite has 10 cabins and expects each to be rented for 26
weeks, per year. Based on this information, the weekly user fee needed to break even
for the fiscal year is - ✔✔Correct Answer: $692.31.
✔✔I 54.All of the following are general criteria that a cost must meet to be allowable
under an intergovernmental cost-reimbursement contract or grant EXCEPT that the cost
must be - ✔✔Correct Answer: used to meet the matching requirement of another award.
✔✔I 55.The Digital Accountability and Transparency Act combines which two pieces of
financial data to improve open reporting of government financial information? -
✔✔Correct Answer: data standards and an on-line data exchange
✔✔I 56.Which of the following would be affected by both the measurement focus and
the basis of accounting? - ✔✔Correct Answer: a transaction involving legal and other
claims
✔✔I 57.Governments use cost accounting information to - ✔✔Correct Answer: monitor
and improve program economy, receive cost reimbursements, establish user fees and
identify efficiencies.
✔✔I 58.Which objective of federal financial reporting is exemplified by the statement
that "Federal financial reporting should help the reader determine whether future
budgetary resources will likely be sufficient to sustain public services and to meet
obligations as they become due."? - ✔✔Correct Answer: stewardship
✔✔I 59.If a proposed standard is moving through the due process phases of approval
for the GASB, FASB, and FASAB Standards, what is the final process document that is
published before the final standard is issued? - ✔✔Correct Answer: exposure draft
✔✔I 60.The objective of the current financial resources measurement focus is to -
✔✔Correct Answer: determine if there are sufficient current financial resources
available to pay for goods and services.
, ✔✔I 61.All of the following are requirements of FASAB SFFAS 4: Managerial Cost
Accounting Concepts and Standards EXCEPT that - ✔✔Correct Answer: each reporting
entity should accumulate and report the costs of its activities on a regular basis for
financial statement purposes.
✔✔I 62.A state agency receives two federal grants to provide support for incoming
refugees. Grant A covers staffing costs only and is required to be used before staffing
costs can be covered under Grant B. Grant B does not restrict activities as long as it
relates to the resettlement of refugees. Per federal rules, all costs are required to be
matched with 25% non-federal funds. The state's refugee program has strict rules,
requiring any private donations to be used first, and making it unallowable for state
funding to be spent on purchasing household items. The agency has the activity shown
on the left. Based on the OMB Uniform Guidance, what is the total cost allowed to be
charged to Grant B? - ✔✔Correct Answer: $264,375
✔✔I 63.When determining costs to recover through a user fee, expenses associated
with the salary of the program manager are considered - ✔✔Correct Answer: a direct
cost.
✔✔I 64.Accumulated depreciation is recorded in which type of account? - ✔✔Correct
Answer: contra-asset
✔✔I 65.Organizations that are legally-separate, tax-exempt entities, should be
discretely presented as component units if all of the following criteria are met EXCEPT -
✔✔Correct Answer: the separately elected governing body determines the economic
resources received or held without the primary government's substantive authority to
approve and modify the budget.
✔✔I 66.The GASB members are appointed by the - ✔✔Correct Answer: Financial
Accounting Foundation.
✔✔I 67.What factors should be considered when determining the amount of
depreciation to record? - ✔✔Correct Answer: historical cost, depreciable life and
salvage value
✔✔I 68.Which of the following is an example of interperiod equity? - ✔✔Correct Answer:
issuing a 30-year serial bond to finance the construction of a recreation center
✔✔I 69.The county recorder's office sells hunting licenses, which are valid for one
season. Licenses have been sold from this office for the past 20 years and have seen
relatively stable growth. To forecast sales in the upcoming year, the recorder reviews
receipts for the previous three years and adjusts for the increase in the license fee. This
method of forecasting revenues is called - ✔✔Correct Answer: trend analysis.
