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CGFM Exam 2 Section 2 Chapter 1
Questions and Correct Answers/ Latest
Update / Already Graded
What significant change occurred in governmental accounting with
GASB Statement 34?
Ans: It introduced a new reporting model for state and local
governments, moving away from a primarily fund-based
approach.
What was the primary focus of the previous accounting model before
GASB Statement 34?
Ans: The previous model focused on legal compliance and
fiscal accountability, primarily on a cash basis.
What is the role of the Governmental Accounting Standards Board
(GASB)?
Ans: GASB establishes generally accepted accounting
principles (GAAP) for state and local governments.
What is required for state and local governments to receive an
unmodified audit opinion?
All rights reserved © 2025/ 2026 |
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Ans: They must prepare financial reports in accordance with
GAAP.
What are the primary users of financial reports for state and local
governments?
Ans: Public officials, credit rating agencies, investors, and
creditors.
What is the paramount objective of financial reporting according to
GASB?
Ans: To provide information that assists users in assessing
accountability.
What does interperiod equity refer to in governmental financial
reporting?
Ans: It refers to determining whether current-year revenues
were sufficient to pay for current-year services.
What was the GASB established under?
Ans: The oversight of the Financial Accounting Foundation's
Board of Trustees (FAF) in 1984.
All rights reserved © 2025/ 2026 |
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What did GASB's first statement initiate?
Ans: The codification of accounting standards for state and
local governments.
What is the codification in the context of GASB?
Ans: An integration of currently effective accounting and
financial reporting standards for state and local governments.
What is the significance of Concepts Statement 1?
Ans: It sets forth the framework used by GASB in establishing
accounting standards.
What should financial reporting demonstrate regarding a
governmental entity's budget?
Ans: It should demonstrate compliance with the entity's legally
adopted budget and other finance-related legal requirements.
What information should financial reporting provide about a
governmental entity's financial position?
Ans: It should indicate whether the entity's financial position
improved or deteriorated due to the year's operations.
All rights reserved © 2025/ 2026 |
CGFM Exam 2 Section 2 Chapter 1
Questions and Correct Answers/ Latest
Update / Already Graded
What significant change occurred in governmental accounting with
GASB Statement 34?
Ans: It introduced a new reporting model for state and local
governments, moving away from a primarily fund-based
approach.
What was the primary focus of the previous accounting model before
GASB Statement 34?
Ans: The previous model focused on legal compliance and
fiscal accountability, primarily on a cash basis.
What is the role of the Governmental Accounting Standards Board
(GASB)?
Ans: GASB establishes generally accepted accounting
principles (GAAP) for state and local governments.
What is required for state and local governments to receive an
unmodified audit opinion?
All rights reserved © 2025/ 2026 |
, Page |2
Ans: They must prepare financial reports in accordance with
GAAP.
What are the primary users of financial reports for state and local
governments?
Ans: Public officials, credit rating agencies, investors, and
creditors.
What is the paramount objective of financial reporting according to
GASB?
Ans: To provide information that assists users in assessing
accountability.
What does interperiod equity refer to in governmental financial
reporting?
Ans: It refers to determining whether current-year revenues
were sufficient to pay for current-year services.
What was the GASB established under?
Ans: The oversight of the Financial Accounting Foundation's
Board of Trustees (FAF) in 1984.
All rights reserved © 2025/ 2026 |
, Page |3
What did GASB's first statement initiate?
Ans: The codification of accounting standards for state and
local governments.
What is the codification in the context of GASB?
Ans: An integration of currently effective accounting and
financial reporting standards for state and local governments.
What is the significance of Concepts Statement 1?
Ans: It sets forth the framework used by GASB in establishing
accounting standards.
What should financial reporting demonstrate regarding a
governmental entity's budget?
Ans: It should demonstrate compliance with the entity's legally
adopted budget and other finance-related legal requirements.
What information should financial reporting provide about a
governmental entity's financial position?
Ans: It should indicate whether the entity's financial position
improved or deteriorated due to the year's operations.
All rights reserved © 2025/ 2026 |
