CGFM TEST 2 2026 Expert
Verifed Ace the Test
Governments exist to provide services - ANSWER ✔✔no profit
motive, no single measure of success
Primary funding source = - ANSWER ✔✔taxes (involuntary
payments, because there is no ability to match services to those who
provide the resource)
Budget process = - ANSWER ✔✔primary control device in
government
US Constitution provides two levels of government - 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 - 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.
1) Legal Accountability - ANSWER ✔✔public officials are accountable
for the extablishment of controls to ensure that transations are
processed properly
2) Performance Accountability - ANSWER ✔✔acting in an efficient,
effective, or economic manner.
3) Fiscal Accountability - ANSWER ✔✔raising and allocation of
resources to accomplish objectives
4) Operational Accountability - ANSWER ✔✔stewardship of public
resources
Which branch is accountable to whom? - ANSWER ✔✔Legislative -->
to the public
,Executive --> to legislative and public as well as other governments
Interperiod Equity - 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 - ANSWER ✔✔* only to meet cash flow
needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports - ANSWER ✔✔1) Legislators and oversight
groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, 6) Employees and employee organizations
Need for financial reports - 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 - ANSWER ✔✔provides current
information as of the date of the reports (e.g. balance sheet)
Period financial reports - ANSWER ✔✔reports the activity for an
entire fiscal period (month, year)
General Purpose External Financial Reports (GPEFR)/CAFR -
ANSWER ✔✔1) audited financial statements (including notes)
"basic financial statements" - state/local
"principal financial statements" - federal
2) required supplementary information
3) other accompanying information (voluntary)
Verifed Ace the Test
Governments exist to provide services - ANSWER ✔✔no profit
motive, no single measure of success
Primary funding source = - ANSWER ✔✔taxes (involuntary
payments, because there is no ability to match services to those who
provide the resource)
Budget process = - ANSWER ✔✔primary control device in
government
US Constitution provides two levels of government - 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 - 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.
1) Legal Accountability - ANSWER ✔✔public officials are accountable
for the extablishment of controls to ensure that transations are
processed properly
2) Performance Accountability - ANSWER ✔✔acting in an efficient,
effective, or economic manner.
3) Fiscal Accountability - ANSWER ✔✔raising and allocation of
resources to accomplish objectives
4) Operational Accountability - ANSWER ✔✔stewardship of public
resources
Which branch is accountable to whom? - ANSWER ✔✔Legislative -->
to the public
,Executive --> to legislative and public as well as other governments
Interperiod Equity - 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 - ANSWER ✔✔* only to meet cash flow
needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports - ANSWER ✔✔1) Legislators and oversight
groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, 6) Employees and employee organizations
Need for financial reports - 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 - ANSWER ✔✔provides current
information as of the date of the reports (e.g. balance sheet)
Period financial reports - ANSWER ✔✔reports the activity for an
entire fiscal period (month, year)
General Purpose External Financial Reports (GPEFR)/CAFR -
ANSWER ✔✔1) audited financial statements (including notes)
"basic financial statements" - state/local
"principal financial statements" - federal
2) required supplementary information
3) other accompanying information (voluntary)
