CMFO REVIEWED STUDY
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
Accounts Receivable - A/R - ANS-Amounts owed to you by other parties, such as
taxpayers, other agencies & financial institutions and shown on its balance sheet as an
asset
Chart of Accounts - ANS-The standard system of account titles kept for accounting
records
- Flexible Chart of Accounts (FCOA)
-Use to organize and segregate expenditures, revenues, assets, and liabilities
Accounting Equation - ANS-Asset = Liabilities (reserve) + Fund Balance (surplus)
Dr = Cr + Cr
- Balance Sheet based on accounting equation
- Balance Sheet presents asset on the left-hand side
Steps In a Transaction (Accounting Entries) - ANS-1. Business Transaction (Source
Document)
2. Journal Entry
3. General Ledger
4. Trial Balance
5. Finance Statements (Balance Sheet, Income Sheet)
,Accounts Payable, A/P - ANS-The bills your municipalities owes to vendors and other
agencies such as the school district, county, and special district, shown on the
organization's balance sheet as a liability
Accrual Method - ANS-A system that records the sales (any types), regardless when
payment is made.
- Expenditure is recorded when goods or services are received, though the payment
may be deferred
Balance Sheet - ANS--Financial "Snapshot" of the organization at a given date in time
-It lists assets, liabilities, and fund balance
-Real life example of accounting equation
Assets - ANS-Items of value held by the organization
Accounting System - ANS-The total structure of records and procedure which record,
classify and report information on the financial position and operations of a
governmential unit or any of its funds and organizational components
Adjusting Entries - ANS-Journal entries usually made at end of an accounting peroid to
allocate revenue and expenditures to the period in which they actually occurred
Cash Method - ANS-Revenue is recorded when cash is received
Expenditures is recorded when check is written to a vendor
A/P Ledger - ANS-Helps control expenditures and payables
-At month's end, A/P ledger is reconciled with A/P control account
Modified Accrual - ANS-Other Comprehensive Basis of Accounting (OCBOA)
Revenue is recorded when cash is in hand
Expenditures recorded when purchase is made
, A/R Ledger - ANS-Maintained for each individual or entity the municipal expects
payments from
Cash Flow Forecast - ANS-Identify cash flowing in and out of organization over 90 day
period
Capital Expenditures - ANS-The acquisition or improvement of equipment, facilities,
roads, parks, sewer and water equipment
- Must have useful life of 5 years
Cash - ANS-Currency, coin, checks, money orders, and banker's draft in hand for
deposit
Basic Laws CFO Must Comply With - ANS-NJSA 40A: 2 Local Bond Law
4 Local Budget Law
5 Local Fiscal Affairs Law
11 Local Public Contracts Law
School budget - ANS-School budgets do not have to be balanced
No required surplus
NJ Department of Education Board - ANS-13 Member board
No compensation
6 year terms
At Least 3 women
No 2 members from the same count
Cash Management Plan Requirement - ANS-Required under NJSA 40A:5 Local Fiscal
Affair Law
Designated Depositories - GUDPA
Depositories must receive certification from Depart of Banking quarterly
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
Accounts Receivable - A/R - ANS-Amounts owed to you by other parties, such as
taxpayers, other agencies & financial institutions and shown on its balance sheet as an
asset
Chart of Accounts - ANS-The standard system of account titles kept for accounting
records
- Flexible Chart of Accounts (FCOA)
-Use to organize and segregate expenditures, revenues, assets, and liabilities
Accounting Equation - ANS-Asset = Liabilities (reserve) + Fund Balance (surplus)
Dr = Cr + Cr
- Balance Sheet based on accounting equation
- Balance Sheet presents asset on the left-hand side
Steps In a Transaction (Accounting Entries) - ANS-1. Business Transaction (Source
Document)
2. Journal Entry
3. General Ledger
4. Trial Balance
5. Finance Statements (Balance Sheet, Income Sheet)
,Accounts Payable, A/P - ANS-The bills your municipalities owes to vendors and other
agencies such as the school district, county, and special district, shown on the
organization's balance sheet as a liability
Accrual Method - ANS-A system that records the sales (any types), regardless when
payment is made.
- Expenditure is recorded when goods or services are received, though the payment
may be deferred
Balance Sheet - ANS--Financial "Snapshot" of the organization at a given date in time
-It lists assets, liabilities, and fund balance
-Real life example of accounting equation
Assets - ANS-Items of value held by the organization
Accounting System - ANS-The total structure of records and procedure which record,
classify and report information on the financial position and operations of a
governmential unit or any of its funds and organizational components
Adjusting Entries - ANS-Journal entries usually made at end of an accounting peroid to
allocate revenue and expenditures to the period in which they actually occurred
Cash Method - ANS-Revenue is recorded when cash is received
Expenditures is recorded when check is written to a vendor
A/P Ledger - ANS-Helps control expenditures and payables
-At month's end, A/P ledger is reconciled with A/P control account
Modified Accrual - ANS-Other Comprehensive Basis of Accounting (OCBOA)
Revenue is recorded when cash is in hand
Expenditures recorded when purchase is made
, A/R Ledger - ANS-Maintained for each individual or entity the municipal expects
payments from
Cash Flow Forecast - ANS-Identify cash flowing in and out of organization over 90 day
period
Capital Expenditures - ANS-The acquisition or improvement of equipment, facilities,
roads, parks, sewer and water equipment
- Must have useful life of 5 years
Cash - ANS-Currency, coin, checks, money orders, and banker's draft in hand for
deposit
Basic Laws CFO Must Comply With - ANS-NJSA 40A: 2 Local Bond Law
4 Local Budget Law
5 Local Fiscal Affairs Law
11 Local Public Contracts Law
School budget - ANS-School budgets do not have to be balanced
No required surplus
NJ Department of Education Board - ANS-13 Member board
No compensation
6 year terms
At Least 3 women
No 2 members from the same count
Cash Management Plan Requirement - ANS-Required under NJSA 40A:5 Local Fiscal
Affair Law
Designated Depositories - GUDPA
Depositories must receive certification from Depart of Banking quarterly
