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CGFO Accounting and Financial Reporting Questions
And Answers Already Graded A+
What are the two most important financial documents in both public and private
organizations? - (ANSWER)Budget and annual financial report.
What is the purpose of the accounting system? - (ANSWER)To provide a record-
keeping framework in which to record (in journals) the transactions authorized by
the budget and to reconcile (in ledgers) their cumulative financial impact.
What are the six goals of accounting? - (ANSWER)Provide financial information
that is: Understandable, reliable, relevant, comparable, consistent, and timely.
What are generally accepted accounting principles (GAAP)? - (ANSWER)Standards
adopted by the accounting profession for recording and reporting transactions.
What is the role of the Governmental Accounting Standards Board (GASB)? -
(ANSWER)To provide standards, interpretations, and technical bulletins for state
and local governments.
What are some topics of discussion concerning GAAP? - (ANSWER)Basis of
accounting, treatment of fixed assets, and long-term debt.
What is one benefit of standardizing the accounting system? -
(ANSWER)Comparisons can be made across governments and conclusions drawn
on the relative financial health of each.
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What is another benefit of standardizing the accounting system? -
(ANSWER)Users can interpret financial reports more easily.
What is the most important benefit of standardizing the accounting system? -
(ANSWER)Assuring users that a common set of rules is being applied to reporting
financial operations.
What is the purpose of the operating budget? - (ANSWER)To plan for spending
and expected revenues.
What is the purpose of the capital budget? - (ANSWER)To plan for spending on
long-term assets.
What is the purpose of the accounting system? - (ANSWER)To record financial
transactions authorized by the budget.
What is the purpose of journals in the accounting system? - (ANSWER)To record
transactions.
What is the purpose of ledgers in the accounting system? - (ANSWER)To reconcile
the cumulative financial impact of transactions.
What is the role of generally accepted accounting principles (GAAP)? -
(ANSWER)To guide the recording, reconciling, and reporting of transactions.
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What is GAAP? - (ANSWER)Generally Accepted Accounting Principles
What are the goals of GAAP? - (ANSWER)Accuracy, reliability, and consistency in
reporting
How do businesses and governments report their results differently? -
(ANSWER)Businesses consolidate results, governments report by funds
What is a fund in governmental accounting? - (ANSWER)A fiscal and accounting
entity with a self-balancing set of accounts
How do funds function in governmental accounting? - (ANSWER)Like self-
contained businesses with their own accounts and financial reports
What is Principle #1 of governmental accounting? - (ANSWER)Maintain accounts
on a GAAP basis and comply with finance-related legal requirements
What is Principle #2 of governmental accounting? - (ANSWER)Funds must be the
basis for maintaining accounting records
What is Principle #3 of governmental accounting? - (ANSWER)Identify and define
the eleven basic types of funds used in governmental accounting
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What is Principle #4 of governmental accounting? - (ANSWER)Maintain a
minimum number of funds and only those required by law
What is Principle #5 of governmental accounting? - (ANSWER)Maintain a
distinction in accounting records among capital assets of different funds
What is Principle #6 of governmental accounting? - (ANSWER)Maintain historical
cost of capital assets and long-term debt in accounting records
What is Principle #7 of governmental accounting? - (ANSWER)Record
depreciation of capital assets in accounting records
What is Principle #8 of governmental accounting? - (ANSWER)Maintain a clear
distinction between long-term liabilities of specific funds and the general
government
What is Principle #9 of governmental accounting? - (ANSWER)Use accrual basis
for government-wide financial statements and modified accrual basis for fund-
specific financial statements
What is Principle #10? - (ANSWER)Annual budget adoption and comparison with
actual results.
What is Principle #11? - (ANSWER)Recognition and reporting of interfund
transfers depending on reciprocity.
CGFO Accounting and Financial Reporting Questions
And Answers Already Graded A+
What are the two most important financial documents in both public and private
organizations? - (ANSWER)Budget and annual financial report.
What is the purpose of the accounting system? - (ANSWER)To provide a record-
keeping framework in which to record (in journals) the transactions authorized by
the budget and to reconcile (in ledgers) their cumulative financial impact.
What are the six goals of accounting? - (ANSWER)Provide financial information
that is: Understandable, reliable, relevant, comparable, consistent, and timely.
What are generally accepted accounting principles (GAAP)? - (ANSWER)Standards
adopted by the accounting profession for recording and reporting transactions.
What is the role of the Governmental Accounting Standards Board (GASB)? -
(ANSWER)To provide standards, interpretations, and technical bulletins for state
and local governments.
What are some topics of discussion concerning GAAP? - (ANSWER)Basis of
accounting, treatment of fixed assets, and long-term debt.
What is one benefit of standardizing the accounting system? -
(ANSWER)Comparisons can be made across governments and conclusions drawn
on the relative financial health of each.
,2|Page
What is another benefit of standardizing the accounting system? -
(ANSWER)Users can interpret financial reports more easily.
What is the most important benefit of standardizing the accounting system? -
(ANSWER)Assuring users that a common set of rules is being applied to reporting
financial operations.
What is the purpose of the operating budget? - (ANSWER)To plan for spending
and expected revenues.
What is the purpose of the capital budget? - (ANSWER)To plan for spending on
long-term assets.
What is the purpose of the accounting system? - (ANSWER)To record financial
transactions authorized by the budget.
What is the purpose of journals in the accounting system? - (ANSWER)To record
transactions.
What is the purpose of ledgers in the accounting system? - (ANSWER)To reconcile
the cumulative financial impact of transactions.
What is the role of generally accepted accounting principles (GAAP)? -
(ANSWER)To guide the recording, reconciling, and reporting of transactions.
,3|Page
What is GAAP? - (ANSWER)Generally Accepted Accounting Principles
What are the goals of GAAP? - (ANSWER)Accuracy, reliability, and consistency in
reporting
How do businesses and governments report their results differently? -
(ANSWER)Businesses consolidate results, governments report by funds
What is a fund in governmental accounting? - (ANSWER)A fiscal and accounting
entity with a self-balancing set of accounts
How do funds function in governmental accounting? - (ANSWER)Like self-
contained businesses with their own accounts and financial reports
What is Principle #1 of governmental accounting? - (ANSWER)Maintain accounts
on a GAAP basis and comply with finance-related legal requirements
What is Principle #2 of governmental accounting? - (ANSWER)Funds must be the
basis for maintaining accounting records
What is Principle #3 of governmental accounting? - (ANSWER)Identify and define
the eleven basic types of funds used in governmental accounting
, 4|Page
What is Principle #4 of governmental accounting? - (ANSWER)Maintain a
minimum number of funds and only those required by law
What is Principle #5 of governmental accounting? - (ANSWER)Maintain a
distinction in accounting records among capital assets of different funds
What is Principle #6 of governmental accounting? - (ANSWER)Maintain historical
cost of capital assets and long-term debt in accounting records
What is Principle #7 of governmental accounting? - (ANSWER)Record
depreciation of capital assets in accounting records
What is Principle #8 of governmental accounting? - (ANSWER)Maintain a clear
distinction between long-term liabilities of specific funds and the general
government
What is Principle #9 of governmental accounting? - (ANSWER)Use accrual basis
for government-wide financial statements and modified accrual basis for fund-
specific financial statements
What is Principle #10? - (ANSWER)Annual budget adoption and comparison with
actual results.
What is Principle #11? - (ANSWER)Recognition and reporting of interfund
transfers depending on reciprocity.
