CGFM Exam #2 - Governmental Accounting questions and
answers 2024\2025 Grade A+
Reasons Governments are not Run Like Businesses
- correct answer 1) Goals and objectives differ considerably from those in the private sector.
2) Exists to provide services, not gain profits.
3) Goals and objectives are sometimes established with input from the public.
4) Resources are derived primarily from taxes; there are no shareholders.
5) No single measure of success; can't use increasing market share, earnings per share, or the fact that it
is still in business like private sector corporations.
6) Legally bound by budget.
7) Must provide reports that demonstrate compliance.
Government Budget
- correct answer Establishes spending authorizations, outlines programs and services to be provided,
and defines the sources of revenues that will be used to fund them. Specifies restrictions on the use of
resources.
Private Sector Budget
- correct answer Guide to operations. Used as a benchmark for performance, goals for growth, or as a
management tool for planning.
Financial Reporting
- correct answer Primary mechanism by which public officials are able to demonstrate accountability.
Accountability
- correct answer In gov't, it is the cornerstone of financial reporting. Based on the belief that the gov't
has a responsibility to report, the public has a right to know, and the ultimate power belongs to the
people.
answers 2024\2025 Grade A+
Reasons Governments are not Run Like Businesses
- correct answer 1) Goals and objectives differ considerably from those in the private sector.
2) Exists to provide services, not gain profits.
3) Goals and objectives are sometimes established with input from the public.
4) Resources are derived primarily from taxes; there are no shareholders.
5) No single measure of success; can't use increasing market share, earnings per share, or the fact that it
is still in business like private sector corporations.
6) Legally bound by budget.
7) Must provide reports that demonstrate compliance.
Government Budget
- correct answer Establishes spending authorizations, outlines programs and services to be provided,
and defines the sources of revenues that will be used to fund them. Specifies restrictions on the use of
resources.
Private Sector Budget
- correct answer Guide to operations. Used as a benchmark for performance, goals for growth, or as a
management tool for planning.
Financial Reporting
- correct answer Primary mechanism by which public officials are able to demonstrate accountability.
Accountability
- correct answer In gov't, it is the cornerstone of financial reporting. Based on the belief that the gov't
has a responsibility to report, the public has a right to know, and the ultimate power belongs to the
people.
