MGRADES
MBA Test UPDATED ACTUAL Exam
Questions and CORRECT Answers
In accordance with GASB standards, both a general purpose government and a special purpose
government can be considered primary governments if certain criteria are met. (T/F) -
CORRECT ANSWER -T
One of the required reconciliations in converting governmental fund financial statements to
governmental activities statements at the government-wide level is an adjustment for internal
service funds' assets, liabilities, operating income (loss), and transfers. - CORRECT
ANSWER -T
Similar to for-profit entities, the GASB requires governments to prepare quarterly interim
financial reports. - CORRECT ANSWER -F
Similar to publicly traded corporations, governments are required to provide financial
information in a machine-readable format - CORRECT ANSWER -F
State and local governments should prepare only those financial reports required by law—
generally year-end financial statements. - CORRECT ANSWER -F
An effective system for evaluating financial performance helps management to assess whether
financial performance can meet creditor and service obligations. - CORRECT ANSWER -
T
Environmental factors facing a government have little impact on a city's fiscal policy. -
CORRECT ANSWER -F
Failure to achieve interperiod equity may negatively impact a government's financial condition. -
CORRECT ANSWER -T
,MGRADES
Internal managers and credit analysts evaluate financial condition of a government in the same
way. - CORRECT ANSWER -F
To provide a meaningful interpretation of a financial ratio a benchmark is needed. - CORRECT
ANSWER -T
n accordance with GASB standards, which of the following would be considered a primary
government?
a. An independent public school district.
b. A county housing authority that administers federal funds received by the county.
c. A state pension trust fund.
d. A city building authority that finances city projects. - CORRECT ANSWER -A
In the reconciliation process which of the following would be added to the total fund balances of
governmental funds to arrive at the net position of governmental activities?
a.
Bond interest payable.
b.
Construction work in progress.
c.
Accumulated depreciation.
d.
Premium on bonds payable. - CORRECT ANSWER -b
Under GASB standards, where are nonmajor funds reported?
Question 13Select one:a.
In a note disclosure following the financial statements.
b.
In aggregate amounts in a single column in the fund financial statements.
, MGRADES
c.
In the government-wide financial statements.
d.
In the management's discussion and analysis preceding the financial statements. - CORRECT
ANSWER -b
What constitutes the basic financial statements of a government?
Question 14Select one:a.
Government-wide financial statements plus fund financial statements plus notes plus required
supplementary information (RSI).
b.
Financial section of the comprehensive annual financial report (CAFR).
c.
Government-wide financial statements plus fund financial statements plus notes.
d.
Government-wide financial statements plus notes. - CORRECT ANSWER -c
Which of the following actions is not required to convert data from the governmental fund
financial statements to enable preparation of the government-wide financial statements?
Question 16Select one:a.
Eliminating receivables and payables between governmental and enterprise funds.
b.
Adding annual depreciation expense proportionately to functional expense categories.
c.
Eliminating interfund payables and receivables between governmental funds.
d.
Aggregating fund information. - CORRECT ANSWER -a
MBA Test UPDATED ACTUAL Exam
Questions and CORRECT Answers
In accordance with GASB standards, both a general purpose government and a special purpose
government can be considered primary governments if certain criteria are met. (T/F) -
CORRECT ANSWER -T
One of the required reconciliations in converting governmental fund financial statements to
governmental activities statements at the government-wide level is an adjustment for internal
service funds' assets, liabilities, operating income (loss), and transfers. - CORRECT
ANSWER -T
Similar to for-profit entities, the GASB requires governments to prepare quarterly interim
financial reports. - CORRECT ANSWER -F
Similar to publicly traded corporations, governments are required to provide financial
information in a machine-readable format - CORRECT ANSWER -F
State and local governments should prepare only those financial reports required by law—
generally year-end financial statements. - CORRECT ANSWER -F
An effective system for evaluating financial performance helps management to assess whether
financial performance can meet creditor and service obligations. - CORRECT ANSWER -
T
Environmental factors facing a government have little impact on a city's fiscal policy. -
CORRECT ANSWER -F
Failure to achieve interperiod equity may negatively impact a government's financial condition. -
CORRECT ANSWER -T
,MGRADES
Internal managers and credit analysts evaluate financial condition of a government in the same
way. - CORRECT ANSWER -F
To provide a meaningful interpretation of a financial ratio a benchmark is needed. - CORRECT
ANSWER -T
n accordance with GASB standards, which of the following would be considered a primary
government?
a. An independent public school district.
b. A county housing authority that administers federal funds received by the county.
c. A state pension trust fund.
d. A city building authority that finances city projects. - CORRECT ANSWER -A
In the reconciliation process which of the following would be added to the total fund balances of
governmental funds to arrive at the net position of governmental activities?
a.
Bond interest payable.
b.
Construction work in progress.
c.
Accumulated depreciation.
d.
Premium on bonds payable. - CORRECT ANSWER -b
Under GASB standards, where are nonmajor funds reported?
Question 13Select one:a.
In a note disclosure following the financial statements.
b.
In aggregate amounts in a single column in the fund financial statements.
, MGRADES
c.
In the government-wide financial statements.
d.
In the management's discussion and analysis preceding the financial statements. - CORRECT
ANSWER -b
What constitutes the basic financial statements of a government?
Question 14Select one:a.
Government-wide financial statements plus fund financial statements plus notes plus required
supplementary information (RSI).
b.
Financial section of the comprehensive annual financial report (CAFR).
c.
Government-wide financial statements plus fund financial statements plus notes.
d.
Government-wide financial statements plus notes. - CORRECT ANSWER -c
Which of the following actions is not required to convert data from the governmental fund
financial statements to enable preparation of the government-wide financial statements?
Question 16Select one:a.
Eliminating receivables and payables between governmental and enterprise funds.
b.
Adding annual depreciation expense proportionately to functional expense categories.
c.
Eliminating interfund payables and receivables between governmental funds.
d.
Aggregating fund information. - CORRECT ANSWER -a
