AGA CGFM - Competency test preparation questions with
approved Answers 2024/2025
Deficit - correct answer Occurs when government expenditures for a specific
fiscal period exceed revenues and other financial resource inflows
Diligence - correct answer Pursuing an event, action or assignment to a timely
and sufficient end or close
Discretionary Grant - correct answer A term sometimes used to mean "Project
Grant"
Donation - correct answer Voluntary contribution that confers no rights or
benefits on the giver
Due Care - correct answer To discharge professional responsibilities with
competence and diligence to the best of one's ability, and with the same level of
ability and skill as others in similar positions. It also means to act in the best
interest of those served.
Earmarking - correct answer Variation on the use of a special fund. Revenue
from specific taxes or other sources is set aside for specific activities. One
example is the use of gasoline taxes for highway improvements. Also referred to
as "dedicated collections". The term is also used to signify the legislature
reserving a portion of an appropriation for a specific, limited purpose
Enterprise Resource Planning (ERP) System - correct answer Major "end-to-
end" computer system that links many functions and departments. Used to
simplify and streamline financial management, and to integrate operations with
financial management
,Estate Tax - correct answer Form of wealth tax. Levied on the estate of the
deceased person before his or her assets are distributed to heirs
Ethics - correct answer A complex system of discipline that civilized societies
impose on themselves through laws, customs, standards, social etiquette and
other rules to govern moral conduct
Excise Tax - correct answer Form of consumption tax. Levied on the
consumption of a particular type of good or participation in a certain activity.
Whereas general sales taxes are broad based, excise taxes are more narrowly
targeted.
Executive Order - correct answer Order issued by the president, governor or
local government's chief executive that does not violate laws or statues, and has
substantial impact on policy and procedures of government. It carries less weight
than a law because the legislature or next chief executive may overturn the
previous order.
Fair - correct answer Free from self-interest, prejudice or favoritism. Implies an
elimination of one's own feelings, prejudices and desires so as to achieve a
proper balance of conflicting interests
Federal Accounting Standards Advisory Board (FASAB) - correct answer
Defines GAAP for entities of the federal government, this includes the national
government as a whole plus distinct components
Federalism - correct answer Principle that government authority and
responsibility is shared among different levels of government
Financial Accounting Standards Board (FASB) - correct answer Defines GAAP
for private sector entities. Occasionally, GASB and FASAB make FASB
standards applicable to state or local or the national governments
,Financial Management System - correct answer Organized means for the
collection, processing, transmission, and dissemination of financial information.
Includes policies and procedures and trained personnel, as well as any
applicable computer hardware and software.
Financial Statement Audit - correct answer Examination of financial
statements, accomplished by an independent auditor. Results in an opinion on
whether the financial statements are presented fairly in accordance with GAAP or
other comprehensive basis of accounting.
Financial Report - correct answer External report that depicts financial position
and financial results of an entity
Formula Grant - correct answer A type of intergovernmental grant that includes
both categorical grants and block grants, in which the amount of the grant is
based on a formula, contained in law or regulation that determines the total
amount each recipient will receive, if basic eligibility requirements are satisfied.
Forensic Accounting - correct answer Accounting that implies that the results
will be admissible as legal evidence. This type of accounting combines the skills
of auditors and accountants with investigative techniques, useful for both
detection and prevention of fraud.
General Assembly - correct answer Name often applied to the legislative
branch at the state level.
General Obligation Bond - correct answer Form of government debt that is
backed by the full faith and credit of the government.
General Purpose Government - correct answer Entity at the national, state,
and local level that provides a broad range of services
, Generally Accepted Government Auditing Standards (GAGAS) - correct answer
Issued by the GAO, to define the expected levels of performance for the conduct
of an audit or attestation of a government organization, program, activity, or
function. Also known as the Yellow Book or government auditing standards
Governmental Accounting Standards Board (GASB) - correct answer Defines
GAAP for state and local government entities
Government Corporation - correct answer Quasi-government entity formed to
support businesslike functions where most, if not all, operating expenses are
expected to be covered through revenues and fees, rather than from
appropriated budget authority
Government Performance and Results Act (GPRA) - correct answer requires
federal agencies to create long-term strategic plans. These plans are followed by
annual performance plans (currently performance budgets) and annual
performance reports.
Grant - correct answer Funds transferred from one level of government to
another for specific and broad purposes
Impartial - correct answer Lack of favoritism, not partial or biased, and treating
or affecting all equally
Income Tax - correct answer Tax based on income and levied on individuals or
corporations. Used most often at national and state levels, though some states
allow local governments to impose income taxes
Independence - correct answer Free of relationships that may impair, or
appear to impair, one's ability to act with objectivity. Independence is the quality
of being free of any obligation to particular parties or interests
approved Answers 2024/2025
Deficit - correct answer Occurs when government expenditures for a specific
fiscal period exceed revenues and other financial resource inflows
Diligence - correct answer Pursuing an event, action or assignment to a timely
and sufficient end or close
Discretionary Grant - correct answer A term sometimes used to mean "Project
Grant"
Donation - correct answer Voluntary contribution that confers no rights or
benefits on the giver
Due Care - correct answer To discharge professional responsibilities with
competence and diligence to the best of one's ability, and with the same level of
ability and skill as others in similar positions. It also means to act in the best
interest of those served.
Earmarking - correct answer Variation on the use of a special fund. Revenue
from specific taxes or other sources is set aside for specific activities. One
example is the use of gasoline taxes for highway improvements. Also referred to
as "dedicated collections". The term is also used to signify the legislature
reserving a portion of an appropriation for a specific, limited purpose
Enterprise Resource Planning (ERP) System - correct answer Major "end-to-
end" computer system that links many functions and departments. Used to
simplify and streamline financial management, and to integrate operations with
financial management
,Estate Tax - correct answer Form of wealth tax. Levied on the estate of the
deceased person before his or her assets are distributed to heirs
Ethics - correct answer A complex system of discipline that civilized societies
impose on themselves through laws, customs, standards, social etiquette and
other rules to govern moral conduct
Excise Tax - correct answer Form of consumption tax. Levied on the
consumption of a particular type of good or participation in a certain activity.
Whereas general sales taxes are broad based, excise taxes are more narrowly
targeted.
Executive Order - correct answer Order issued by the president, governor or
local government's chief executive that does not violate laws or statues, and has
substantial impact on policy and procedures of government. It carries less weight
than a law because the legislature or next chief executive may overturn the
previous order.
Fair - correct answer Free from self-interest, prejudice or favoritism. Implies an
elimination of one's own feelings, prejudices and desires so as to achieve a
proper balance of conflicting interests
Federal Accounting Standards Advisory Board (FASAB) - correct answer
Defines GAAP for entities of the federal government, this includes the national
government as a whole plus distinct components
Federalism - correct answer Principle that government authority and
responsibility is shared among different levels of government
Financial Accounting Standards Board (FASB) - correct answer Defines GAAP
for private sector entities. Occasionally, GASB and FASAB make FASB
standards applicable to state or local or the national governments
,Financial Management System - correct answer Organized means for the
collection, processing, transmission, and dissemination of financial information.
Includes policies and procedures and trained personnel, as well as any
applicable computer hardware and software.
Financial Statement Audit - correct answer Examination of financial
statements, accomplished by an independent auditor. Results in an opinion on
whether the financial statements are presented fairly in accordance with GAAP or
other comprehensive basis of accounting.
Financial Report - correct answer External report that depicts financial position
and financial results of an entity
Formula Grant - correct answer A type of intergovernmental grant that includes
both categorical grants and block grants, in which the amount of the grant is
based on a formula, contained in law or regulation that determines the total
amount each recipient will receive, if basic eligibility requirements are satisfied.
Forensic Accounting - correct answer Accounting that implies that the results
will be admissible as legal evidence. This type of accounting combines the skills
of auditors and accountants with investigative techniques, useful for both
detection and prevention of fraud.
General Assembly - correct answer Name often applied to the legislative
branch at the state level.
General Obligation Bond - correct answer Form of government debt that is
backed by the full faith and credit of the government.
General Purpose Government - correct answer Entity at the national, state,
and local level that provides a broad range of services
, Generally Accepted Government Auditing Standards (GAGAS) - correct answer
Issued by the GAO, to define the expected levels of performance for the conduct
of an audit or attestation of a government organization, program, activity, or
function. Also known as the Yellow Book or government auditing standards
Governmental Accounting Standards Board (GASB) - correct answer Defines
GAAP for state and local government entities
Government Corporation - correct answer Quasi-government entity formed to
support businesslike functions where most, if not all, operating expenses are
expected to be covered through revenues and fees, rather than from
appropriated budget authority
Government Performance and Results Act (GPRA) - correct answer requires
federal agencies to create long-term strategic plans. These plans are followed by
annual performance plans (currently performance budgets) and annual
performance reports.
Grant - correct answer Funds transferred from one level of government to
another for specific and broad purposes
Impartial - correct answer Lack of favoritism, not partial or biased, and treating
or affecting all equally
Income Tax - correct answer Tax based on income and levied on individuals or
corporations. Used most often at national and state levels, though some states
allow local governments to impose income taxes
Independence - correct answer Free of relationships that may impair, or
appear to impair, one's ability to act with objectivity. Independence is the quality
of being free of any obligation to particular parties or interests
