AGA CGFM Key Exam Guide Questions and Integral solution
version 2024/2025
Classification methods - correct answer Character, functional, organizational
unit (public safety, education), activity, and object
Activity classification - correct answer Specific lines of work performed within a
department (solid waste collection, waste disposal)
Object classification - correct answer Item or service used (supplies, personnel
services, contracted services)
Is encumbrance procedure always needed? - correct answer No salaries and
wages are often not recorded as encumbrances
Permanent Funds - correct answer Account for resources provided under trust
agreements that are restricted so that only earnings may be expended for
purposes that benefit the public
Capital Projects Funds - correct answer Account for and report financial
resources taht are restricted, committed, or assigned to expenditure for capital
outlays.
Debt Service Funds - correct answer Account for and report financial resources
that are restricted, committed, or assigned to expenditure for principal and
interest
Special Revenue Funds - correct answer Account for and report the proceeds of
special revenue sources that are restricted or committed to expenditure for a
specified purpose other than debt service or capital projects
,General Fund - correct answer Accounts for and reports all financial resources
not accounted for and reported in other funds
Inter-fund transfers - correct answer transfer flows of cash or other assets
without a requirement for repayment.
Annual transfer of resources from the General Fund to a debt service fund -
correct answer Inter-fund transfer classified as other financing sources (debt
service fund) and other financing uses (General fund)
Inter-fund services provided and used - correct answer transactions involving
sales and purchases of goods and services between funds.
Sale of water from water utility (enterprise) fund to the General Fund - correct
answer Enterprise fund records a revenue General fund records an expenidture
Inter-fund reimbursements - correct answer repayments to the funds that initially
recorded expenditures or expenses by the funds responsible
General fund buys stamps that should have been charged to the special revenue
fund. Show reimbursement - correct answer DR Expenditure (Special revenue
fund)
CR Cash
DR Cash (General Fund)
CR Expenditure
Tax anticipation note (TAN) is received from local bank. Record JE for 200,000
TAN - correct answer DR Cash 200,000
CR Tax Anticipation Notes Payable 200,000
, Payment of Liabilities for Accounts Payable (135,000) and Amount due Federal
Government (30,000) as of the end of previous year Record JE - correct answer
DR Accounts Payable 135,000
DR Due to Federal Government 30,000
CR Cash 165,000
Record entry of PO for materials and supplies for 826,000 - correct answer DR
Encumbrances Control 826,000
CR Budgetary Fund Bal-Reserve for Encumbrances 826,000
Record Property Tax Levy of $3,265,306. It is estimated that 2% will be
noncollectable considering local economic conditions - correct answer DR
Taxes Receivable 3,265,306
CR Estimated Uncollectible Taxes 65,306
CR Revenues Control 3,200,000
Current year delinquent taxes in amount of $330,000 are collected on which
interest and penalties of $20,000 had been accrued last period and $3,000 was
collected for the period from first day current period until collection. JE - correct
answer DR Interest and Penalties Receivable 3,000
CR Revenues Control 3,000
To record additional interest of current period
DR Cash 353,000
CR Taxes Receivable 330,000
CR Interest & Penalties Receivable 23,000
Record Collection of Current Taxes - correct answer DR Cash 2,700,000
version 2024/2025
Classification methods - correct answer Character, functional, organizational
unit (public safety, education), activity, and object
Activity classification - correct answer Specific lines of work performed within a
department (solid waste collection, waste disposal)
Object classification - correct answer Item or service used (supplies, personnel
services, contracted services)
Is encumbrance procedure always needed? - correct answer No salaries and
wages are often not recorded as encumbrances
Permanent Funds - correct answer Account for resources provided under trust
agreements that are restricted so that only earnings may be expended for
purposes that benefit the public
Capital Projects Funds - correct answer Account for and report financial
resources taht are restricted, committed, or assigned to expenditure for capital
outlays.
Debt Service Funds - correct answer Account for and report financial resources
that are restricted, committed, or assigned to expenditure for principal and
interest
Special Revenue Funds - correct answer Account for and report the proceeds of
special revenue sources that are restricted or committed to expenditure for a
specified purpose other than debt service or capital projects
,General Fund - correct answer Accounts for and reports all financial resources
not accounted for and reported in other funds
Inter-fund transfers - correct answer transfer flows of cash or other assets
without a requirement for repayment.
Annual transfer of resources from the General Fund to a debt service fund -
correct answer Inter-fund transfer classified as other financing sources (debt
service fund) and other financing uses (General fund)
Inter-fund services provided and used - correct answer transactions involving
sales and purchases of goods and services between funds.
Sale of water from water utility (enterprise) fund to the General Fund - correct
answer Enterprise fund records a revenue General fund records an expenidture
Inter-fund reimbursements - correct answer repayments to the funds that initially
recorded expenditures or expenses by the funds responsible
General fund buys stamps that should have been charged to the special revenue
fund. Show reimbursement - correct answer DR Expenditure (Special revenue
fund)
CR Cash
DR Cash (General Fund)
CR Expenditure
Tax anticipation note (TAN) is received from local bank. Record JE for 200,000
TAN - correct answer DR Cash 200,000
CR Tax Anticipation Notes Payable 200,000
, Payment of Liabilities for Accounts Payable (135,000) and Amount due Federal
Government (30,000) as of the end of previous year Record JE - correct answer
DR Accounts Payable 135,000
DR Due to Federal Government 30,000
CR Cash 165,000
Record entry of PO for materials and supplies for 826,000 - correct answer DR
Encumbrances Control 826,000
CR Budgetary Fund Bal-Reserve for Encumbrances 826,000
Record Property Tax Levy of $3,265,306. It is estimated that 2% will be
noncollectable considering local economic conditions - correct answer DR
Taxes Receivable 3,265,306
CR Estimated Uncollectible Taxes 65,306
CR Revenues Control 3,200,000
Current year delinquent taxes in amount of $330,000 are collected on which
interest and penalties of $20,000 had been accrued last period and $3,000 was
collected for the period from first day current period until collection. JE - correct
answer DR Interest and Penalties Receivable 3,000
CR Revenues Control 3,000
To record additional interest of current period
DR Cash 353,000
CR Taxes Receivable 330,000
CR Interest & Penalties Receivable 23,000
Record Collection of Current Taxes - correct answer DR Cash 2,700,000
