CGFM TEST 2 questions and answers
already passed
Governments exist to provide services - correct answer ✔✔no profit motive, no single measure
of success
Primary funding source = - correct answer ✔✔taxes (involuntary payments, because there is no
ability to match services to those who provide the resource)
Budget process = - correct answer ✔✔primary control device in government
US Constitution provides two levels of government - correct 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 - correct 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 - correct answer ✔✔public officials are accountable for the
extablishment of controls to ensure that transations are processed properly
2) Performance Accountability - correct answer ✔✔acting in an efficient, effective, or economic
manner.
,3) Fiscal Accountability - correct answer ✔✔raising and allocation of resources to accomplish
objectives
4) Operational Accountability - correct answer ✔✔stewardship of public resources
Which branch is accountable to whom? - correct answer ✔✔Legislative --> to the public
Executive --> to legislative and public as well as other governments
Interperiod Equity - correct 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 - correct answer ✔✔* only to meet cash flow needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports - correct answer ✔✔1) Legislators and oversight groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
6) Employees and employee organizations
,Need for financial reports - correct 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 - correct answer ✔✔provides current information as of the date
of the reports (e.g. balance sheet)
Period financial reports - correct answer ✔✔reports the activity for an entire fiscal period
(month, year)
General Purpose External Financial Reports (GPEFR)/CAFR - correct 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)
Special Purpose Financial Reports (may or may not be provided to external users) - correct
answer ✔✔* budget comparison reports
* cash position reports
* offering statements (when issuing debt)
* popular reports
*grantor reports
* service efforts and accomplishments
, * economy and efficiency
Reporting Characteristics - correct answer ✔✔1) understandability
2) reliability - info is verfiable and free from bias
3) relevance
4) timeliness - for decision making purposes
5) consistency - any change in method or principle should be noted
6) comparability
** most comprehensive financial reports provide non-financial information regarding the
performance of the entity.
** info is often based on judgements or estimates base on the application of rules or
conventions
American Recovery and Reinvestment Act (2009) - correct answer ✔✔** important because it
required online reporting of the use of government funds awarded for the purpose of
stimulating the economy - Recovery.gov
Federal Open Government Initiative - correct answer ✔✔government should be transparent,
participatory, and collaborative
* State Dept, Justice Dept, HHS, NASA, Treasury Dept, EPA, Defense, and SSA
Digital Accountability and Transparency Act (DATA Act - 2014) - correct answer ✔✔1) expanded
FFATA of 2006
2) established government wide data standards that is displayed on USAspending.gov
3) simplified reporting for federal funding recipients
already passed
Governments exist to provide services - correct answer ✔✔no profit motive, no single measure
of success
Primary funding source = - correct answer ✔✔taxes (involuntary payments, because there is no
ability to match services to those who provide the resource)
Budget process = - correct answer ✔✔primary control device in government
US Constitution provides two levels of government - correct 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 - correct 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 - correct answer ✔✔public officials are accountable for the
extablishment of controls to ensure that transations are processed properly
2) Performance Accountability - correct answer ✔✔acting in an efficient, effective, or economic
manner.
,3) Fiscal Accountability - correct answer ✔✔raising and allocation of resources to accomplish
objectives
4) Operational Accountability - correct answer ✔✔stewardship of public resources
Which branch is accountable to whom? - correct answer ✔✔Legislative --> to the public
Executive --> to legislative and public as well as other governments
Interperiod Equity - correct 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 - correct answer ✔✔* only to meet cash flow needs
* not for operating purposes
* should match the useful life of capital assets
Users of financial reports - correct answer ✔✔1) Legislators and oversight groups
2) Citizens and taxpayers
3) Investors and Creditors
4) Media
5) Financial and Program managers
6) Employees and employee organizations
,Need for financial reports - correct 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 - correct answer ✔✔provides current information as of the date
of the reports (e.g. balance sheet)
Period financial reports - correct answer ✔✔reports the activity for an entire fiscal period
(month, year)
General Purpose External Financial Reports (GPEFR)/CAFR - correct 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)
Special Purpose Financial Reports (may or may not be provided to external users) - correct
answer ✔✔* budget comparison reports
* cash position reports
* offering statements (when issuing debt)
* popular reports
*grantor reports
* service efforts and accomplishments
, * economy and efficiency
Reporting Characteristics - correct answer ✔✔1) understandability
2) reliability - info is verfiable and free from bias
3) relevance
4) timeliness - for decision making purposes
5) consistency - any change in method or principle should be noted
6) comparability
** most comprehensive financial reports provide non-financial information regarding the
performance of the entity.
** info is often based on judgements or estimates base on the application of rules or
conventions
American Recovery and Reinvestment Act (2009) - correct answer ✔✔** important because it
required online reporting of the use of government funds awarded for the purpose of
stimulating the economy - Recovery.gov
Federal Open Government Initiative - correct answer ✔✔government should be transparent,
participatory, and collaborative
* State Dept, Justice Dept, HHS, NASA, Treasury Dept, EPA, Defense, and SSA
Digital Accountability and Transparency Act (DATA Act - 2014) - correct answer ✔✔1) expanded
FFATA of 2006
2) established government wide data standards that is displayed on USAspending.gov
3) simplified reporting for federal funding recipients
