CMFO FINAL EXAM 2026 ACTUAL QUESTIONS AND
SOLUTIONS RATED A+
✔✔Which of the following statements would be true according to N.J.S.A. 40A2-17 (The
Local Bond Law)?
a) A bond ordinance shall be introduced in full text and approved by a 2/3rds affirmative
vote of the full membership of the governing body
b) A bond ordinance shall be introduced by title and approved by a 2/3rds affirmative
vote of the full membership of the governing body
c) A bond ordinance shall be introduced in full text and approved by a majority vote of
the full membership of the governing body
d) A bond ordinance may be introduced by title and approved by a majority vote of the
full membership of the governing body - ✔✔d) A bond ordinance may be introduced by
title and approved by a majority vote of the full membership of the governing body
✔✔T/F - The Local Bond Law, specifically 40A:2-20 permits the inclusion of expenses
associated with the purpose of a capital project. Some of those expenses are architect's
fees, accounting, engineering and inspection costs. In addition it is permitted to include
the interest on obligations until the end of the fiscal year in the year of issue. - ✔✔a)
True
✔✔When a governing body has concluded that the limitations as to maturities as
stipulated by N.J.S.A. 40A:2-26 will adversely affect the financial position of the local
unit. The limitation causing the adverse condition, is that no annual installment for debt
service shall exceed by more than what percentage the smallest prior installments? -
✔✔One hundred percent
✔✔Which of the following is a permitted exception for permitting bonds to be sold at a
private sale?
a) If all or part of an authorized issue is $1,000,000 or less
b) If sold to a local School District
c) If no bids were received at the public offering and the private sale is within 30 days
after the advertised date for public bidding
d) All of the above
e) None of the above - ✔✔d) All of the above
✔✔T/F - The requirement per N.J.S.A. 40A:2-31 regarding the contents for the notice of
sale of bonds are; the terms and conditions of such public sale only. - ✔✔False
✔✔Bidders for the sale of bonds shall be required to deposit a certified or cashier's or
treasurer's check for what amount? - ✔✔Equal to not less than 5% of the bonds
✔✔T/F - The Local Bond Law prohibits the issuance of certain agreements from being
authorized as it relates to the issuance or sale of obligations. One such prohibited
,agreement addresses the restriction on the deposit of any moneys received from such
sale. - ✔✔True
✔✔The local unit official charged with the legal responsibility of filing the Annual Debt
Statement - ✔✔The Chief Financial Officer
✔✔A capital budget would best be described as - ✔✔A plan for capital projects
✔✔The Local Bond Law N.J.S.A 40A:2-52, authorizes refunding bonds and requires
which of the following:
a) Refunding ordinance, supplemental debt statement and down payment
b) Refunding ordinance, no supplemental debt statement and no down payment
c) Refunding resolution, no supplemental debt statement and no down payment
d) None of the above - ✔✔b) Refunding ordinance, no supplemental debt statement and
no down payment
✔✔An audit of the fiscal books of a local unit is required to be completed within what
period of time according to N.J.S.A. 40A:5-4. The Fiscal Affairs Law - ✔✔Within 6
months of the end of the fiscal year
✔✔The Local Fiscal Affairs Law N.J.S.A. 40A:5-7 requires that a synopsis of audit along
with recommendations shall be published by whom and within how many days of the
receipt of the audit. - ✔✔By the Clerk within thirty days
✔✔T/F - The Local Fiscal Affairs Law, N.J.S.A. 40A:5-11, has Audit Services as an
exception to public bidding. - ✔✔True
✔✔The Local Fiscal Affairs Law, N.J.S.A. 40A:5-17.1, permits a governing body to
authorize an employee to issue tax refunds automatically if the amount is less than: -
✔✔$10.00
✔✔Tax Anticipation Notes shall mature in the case of County no later than: - ✔✔June
30
✔✔The Local Government Ethics Law provides that a municipality may have a Local
Ethics Board or may have which of the following rule on possible violations. - ✔✔Local
Finance Board
✔✔The financial disclosure statements required by Local Ethics Law are to be
submitted no later than. - ✔✔April 30
, ✔✔The Local Fiscal Affairs Law requires that a local unit adopt a Cash Management
Plan and it further requires reporting by the CFO to the Governing Body of investment
activities how often - ✔✔Monthly
✔✔Decreasing Fund Balance - ✔✔Debit
✔✔Minimum Paydown of BANs (Formula) - ✔✔Total note/ (2 x Useful Life-1)
✔✔Standard System of Account Titles Used by NJ Municipalities - ✔✔Flexible Chart of
Accounts (FCOA)
✔✔NJSA 40A:2 - ✔✔Local Bond Law
✔✔Cash Method of Accounting - ✔✔Revenue Realized when Cash is received
Expense recorded when check is written
✔✔Asset or Liability: Prepaid Insurance - ✔✔Asset
✔✔Capital Plan - How Long? - ✔✔Population < 10,000 - 3 Years
Population > 10,000 - 6 Years
✔✔What is required to set up Petty Cash? - ✔✔Resolution the Amount & Name of
Custodian must be approved DLGS
✔✔Purpose of Fixed Capital Account - ✔✔Completed Projects (Done & Paid For)
✔✔What are the 4 Types of Journal? - ✔✔Cash Receipts
Cash Disbursements
Payroll
General Journal
✔✔T/F - Fixed Asset Values Depreciate - ✔✔False
✔✔T/F - Interfunds are considered income in self-liquidating calulations - ✔✔False
✔✔Debit or Credit - Increase Revenue Balance - ✔✔Credit
✔✔When is the Annual Debt Statement Due - Municipal - ✔✔January 31st or 7/31
✔✔Statute - Local Bond Law - ✔✔NJSA 40A:2
✔✔When is the final payment of a BAN due? - ✔✔1st day of the 5th month following the
close of the 10th fiscal year
SOLUTIONS RATED A+
✔✔Which of the following statements would be true according to N.J.S.A. 40A2-17 (The
Local Bond Law)?
a) A bond ordinance shall be introduced in full text and approved by a 2/3rds affirmative
vote of the full membership of the governing body
b) A bond ordinance shall be introduced by title and approved by a 2/3rds affirmative
vote of the full membership of the governing body
c) A bond ordinance shall be introduced in full text and approved by a majority vote of
the full membership of the governing body
d) A bond ordinance may be introduced by title and approved by a majority vote of the
full membership of the governing body - ✔✔d) A bond ordinance may be introduced by
title and approved by a majority vote of the full membership of the governing body
✔✔T/F - The Local Bond Law, specifically 40A:2-20 permits the inclusion of expenses
associated with the purpose of a capital project. Some of those expenses are architect's
fees, accounting, engineering and inspection costs. In addition it is permitted to include
the interest on obligations until the end of the fiscal year in the year of issue. - ✔✔a)
True
✔✔When a governing body has concluded that the limitations as to maturities as
stipulated by N.J.S.A. 40A:2-26 will adversely affect the financial position of the local
unit. The limitation causing the adverse condition, is that no annual installment for debt
service shall exceed by more than what percentage the smallest prior installments? -
✔✔One hundred percent
✔✔Which of the following is a permitted exception for permitting bonds to be sold at a
private sale?
a) If all or part of an authorized issue is $1,000,000 or less
b) If sold to a local School District
c) If no bids were received at the public offering and the private sale is within 30 days
after the advertised date for public bidding
d) All of the above
e) None of the above - ✔✔d) All of the above
✔✔T/F - The requirement per N.J.S.A. 40A:2-31 regarding the contents for the notice of
sale of bonds are; the terms and conditions of such public sale only. - ✔✔False
✔✔Bidders for the sale of bonds shall be required to deposit a certified or cashier's or
treasurer's check for what amount? - ✔✔Equal to not less than 5% of the bonds
✔✔T/F - The Local Bond Law prohibits the issuance of certain agreements from being
authorized as it relates to the issuance or sale of obligations. One such prohibited
,agreement addresses the restriction on the deposit of any moneys received from such
sale. - ✔✔True
✔✔The local unit official charged with the legal responsibility of filing the Annual Debt
Statement - ✔✔The Chief Financial Officer
✔✔A capital budget would best be described as - ✔✔A plan for capital projects
✔✔The Local Bond Law N.J.S.A 40A:2-52, authorizes refunding bonds and requires
which of the following:
a) Refunding ordinance, supplemental debt statement and down payment
b) Refunding ordinance, no supplemental debt statement and no down payment
c) Refunding resolution, no supplemental debt statement and no down payment
d) None of the above - ✔✔b) Refunding ordinance, no supplemental debt statement and
no down payment
✔✔An audit of the fiscal books of a local unit is required to be completed within what
period of time according to N.J.S.A. 40A:5-4. The Fiscal Affairs Law - ✔✔Within 6
months of the end of the fiscal year
✔✔The Local Fiscal Affairs Law N.J.S.A. 40A:5-7 requires that a synopsis of audit along
with recommendations shall be published by whom and within how many days of the
receipt of the audit. - ✔✔By the Clerk within thirty days
✔✔T/F - The Local Fiscal Affairs Law, N.J.S.A. 40A:5-11, has Audit Services as an
exception to public bidding. - ✔✔True
✔✔The Local Fiscal Affairs Law, N.J.S.A. 40A:5-17.1, permits a governing body to
authorize an employee to issue tax refunds automatically if the amount is less than: -
✔✔$10.00
✔✔Tax Anticipation Notes shall mature in the case of County no later than: - ✔✔June
30
✔✔The Local Government Ethics Law provides that a municipality may have a Local
Ethics Board or may have which of the following rule on possible violations. - ✔✔Local
Finance Board
✔✔The financial disclosure statements required by Local Ethics Law are to be
submitted no later than. - ✔✔April 30
, ✔✔The Local Fiscal Affairs Law requires that a local unit adopt a Cash Management
Plan and it further requires reporting by the CFO to the Governing Body of investment
activities how often - ✔✔Monthly
✔✔Decreasing Fund Balance - ✔✔Debit
✔✔Minimum Paydown of BANs (Formula) - ✔✔Total note/ (2 x Useful Life-1)
✔✔Standard System of Account Titles Used by NJ Municipalities - ✔✔Flexible Chart of
Accounts (FCOA)
✔✔NJSA 40A:2 - ✔✔Local Bond Law
✔✔Cash Method of Accounting - ✔✔Revenue Realized when Cash is received
Expense recorded when check is written
✔✔Asset or Liability: Prepaid Insurance - ✔✔Asset
✔✔Capital Plan - How Long? - ✔✔Population < 10,000 - 3 Years
Population > 10,000 - 6 Years
✔✔What is required to set up Petty Cash? - ✔✔Resolution the Amount & Name of
Custodian must be approved DLGS
✔✔Purpose of Fixed Capital Account - ✔✔Completed Projects (Done & Paid For)
✔✔What are the 4 Types of Journal? - ✔✔Cash Receipts
Cash Disbursements
Payroll
General Journal
✔✔T/F - Fixed Asset Values Depreciate - ✔✔False
✔✔T/F - Interfunds are considered income in self-liquidating calulations - ✔✔False
✔✔Debit or Credit - Increase Revenue Balance - ✔✔Credit
✔✔When is the Annual Debt Statement Due - Municipal - ✔✔January 31st or 7/31
✔✔Statute - Local Bond Law - ✔✔NJSA 40A:2
✔✔When is the final payment of a BAN due? - ✔✔1st day of the 5th month following the
close of the 10th fiscal year
