CGFM EXAM GUIDE
PRACTICE QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
GASB Codification Section 1300 - ANS-Establish the foundational accounting and
reporting standards for state and local FUNDS
Fund - ANS-Funds are fiscal and accounting entities that are segregated for the
purpose of carrying out specific activities.
3 major categories of funds used by state and local governments - ANS-governmental,
proprietary and fiduciary.
Governmental Funds - ANS-Traditionally been used to account for the general services
provided to the public. These services include public safety, health, transportation,
social services, recreation and the administration of the government.
focus of governmental funds for reporting purposes - ANS-use the current financial
resources measurement
focus and modified accrual basis of accounting. Expendable assets are used to pay for
current liabilities. The difference between assets and liabilities is fund balance.
Type of accounting used for governmental funds - ANS-current financial resources
measurement focus and modified accrual basis of accounting.
, Types of Government Funds - ANS-General Fund, Special Revenue Funds, Capital
Projects Funds, Debt Service Funds, Permanent Funds
General Fund purpose - ANS-- to account for and report all financial resources, except
those required to be accounted for in another fund.
- Considered most important fund.
- Most administrative services of the government should be accounted for in the
general fund.
General Fund sources of revenues & expenditures - ANS-• Property taxes, sales taxes
and income taxes are the most common revenue sources used to finance government
activities.
• Permit and license fees may also be significant resources that are used to finance
services.
• Other major revenue sources are intergovernmental grants and shared revenues.
• Fines, forfeitures and investment earnings may be substantial for some governments
Special Revenue Funds Purpose - ANS-should be used to account and report for the
proceeds of specific revenue sources (other than major capital projects) that are
restricted or committed to expenditure for specified purposes.
Single Audit Act/OMB A-123 Audit - ANS-organization-wide audit or examination of an
entity that expends $750,000 or more of Federal assistance (commonly known as
Federal funds, Federal grants, or Federal awards) received for its operations
Capital Projects funds - ANS-used to account and report for financial resources that
are restricted, committed, or assigned to expenditure for major capital facilities and
further capital assets, other than those financed by proprietary and trust funds.
Provide for efficient management of resources for multiple-year capital projects
Debt Service Funds - ANS-is required to be used when legal requirements mandate the
use, or when financial resources are being accumulated to make principal and interest
payments, such as through earmarking tax revenue
PRACTICE QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
GASB Codification Section 1300 - ANS-Establish the foundational accounting and
reporting standards for state and local FUNDS
Fund - ANS-Funds are fiscal and accounting entities that are segregated for the
purpose of carrying out specific activities.
3 major categories of funds used by state and local governments - ANS-governmental,
proprietary and fiduciary.
Governmental Funds - ANS-Traditionally been used to account for the general services
provided to the public. These services include public safety, health, transportation,
social services, recreation and the administration of the government.
focus of governmental funds for reporting purposes - ANS-use the current financial
resources measurement
focus and modified accrual basis of accounting. Expendable assets are used to pay for
current liabilities. The difference between assets and liabilities is fund balance.
Type of accounting used for governmental funds - ANS-current financial resources
measurement focus and modified accrual basis of accounting.
, Types of Government Funds - ANS-General Fund, Special Revenue Funds, Capital
Projects Funds, Debt Service Funds, Permanent Funds
General Fund purpose - ANS-- to account for and report all financial resources, except
those required to be accounted for in another fund.
- Considered most important fund.
- Most administrative services of the government should be accounted for in the
general fund.
General Fund sources of revenues & expenditures - ANS-• Property taxes, sales taxes
and income taxes are the most common revenue sources used to finance government
activities.
• Permit and license fees may also be significant resources that are used to finance
services.
• Other major revenue sources are intergovernmental grants and shared revenues.
• Fines, forfeitures and investment earnings may be substantial for some governments
Special Revenue Funds Purpose - ANS-should be used to account and report for the
proceeds of specific revenue sources (other than major capital projects) that are
restricted or committed to expenditure for specified purposes.
Single Audit Act/OMB A-123 Audit - ANS-organization-wide audit or examination of an
entity that expends $750,000 or more of Federal assistance (commonly known as
Federal funds, Federal grants, or Federal awards) received for its operations
Capital Projects funds - ANS-used to account and report for financial resources that
are restricted, committed, or assigned to expenditure for major capital facilities and
further capital assets, other than those financed by proprietary and trust funds.
Provide for efficient management of resources for multiple-year capital projects
Debt Service Funds - ANS-is required to be used when legal requirements mandate the
use, or when financial resources are being accumulated to make principal and interest
payments, such as through earmarking tax revenue
