AGA CGFM Indispensable Study Assessment Guide Exam
Questions with all Questions Accurately Answered Updated
2024/2025
Serial Bonds - correct answer repmt method in which a few bonds are paid off
each year over a series of years (interest due is lower each year because the
outstanding principal is reduced each year)
Level debt service - correct answer amount paid for principal and interest
about the same each year
Term bonds - correct answer *interest only until final year bond due (ex., 20 yr
bond for $10M, would pay interest only for years 1-19, then $10M plus interest in
year 20)
Requires sinking fund to deposit repmt amount annually
Zero coupon bonds - correct answer *gov't makes no payments (prin or int)
until bond is due
*requires sinking fund
Financing Authorities - correct answer ex., MBA - legally separate entity
vested with the power to issue debt only for a particular government, repaid by
the gov't via "rental payments" equal to the amount of the debt service on the
bonds
Budgetary accounting systems - correct answer prospective in nature (looking
to the future year)
State/local equation:
,Est beg fund balance +
Est revenues =
Amount available for appropriation -
Appropriations =
Est ending fund balance
Federal equation:
Budget resources = status of budgetary resources
Appropriations = unobligated less obligated
Financial accounting systems - correct answer retrospective in nature (focus
on what happened)
Assets = Liabilities + Fund Balance (net position)
Obligations (federal) and Encumbrances (state/local) - correct answer
encumbrance created by purchase order and reversed when goods/services
received and payable is established
Obligation is handled differently
Budgetary reporting - correct answer budget status report - prepared on
budget basis of accounting (an encumbrance is treated the same as an
expenditure).
Focus on unexpended balance - the amount available for future spending
,Revenue forecasting - correct answer depends on the type of revenue
*regression analysis, marginal utility analysis, pay-off matrix, present value
analysis, or simply compare avg growth rates over a previous period of time,
adjusting for known economic factors
Expenditure forecasting - correct answer depends on type of expense
For example, personnel projections should take into account salary schedules,
projected retirements, and attrition analysis (based on historical information)
Operating costs - discretionary
Capital costs - even more discretionary, can be postponed during downturns
Debt service - not discretionary
Budget monitoring - centralized control - correct answer 1) assessment of gov't
performance
2) evaluate relevance of priorities for delivery of services
** also ensures that revenues are inline with projections, and if not, that
necessary reductions are made so no end of year deficit (ex., executive order
from governor/mayor mandating cuts)
Apportionment and Allotment - correct answer budget apportionment made by
OMB to depts (often made quarterly to ensure funds are available for the entire
year)
, Allotments made by depts to operating units or program
Unspent $$ - some gov't allow dept to roll unused allotments to following year.
Sometimes moved to unalloted account at end of quarter, requiring approval
before moving to a different budget category
Vacancy controls - correct answer central mgmt tool involving controlling the
hiring of personnel, ability to place a hiring freeze (ex. Only mission critical
position filled)
Vacancy = opportunity to evaluate the need for the position, the position
duties/classification, etc.
Bases of Accounting - correct answer *Deals with the recognition of financial
transactions or events
1) Cash:
No recognition of receivables or payables, reflects only inflows and outflows of
cash
2) Accrual: (federal gov't)
Revenues are reported in the period they are earned and expenses are reported
in the period they are incurred, tax/grant revenue reported when due, revenue
received prior to being due is deferred, prepaid expenses are assets until
incurred, inventory is an asset until consumed (used by fed gov't, businesses,
and locals for business type funds)
3) Modified Accrual: (state and locals)
Revenues are recognized when they become "measurable" and "available" to
fund expenditures in the current period.
Measurable = amount can be determined
Questions with all Questions Accurately Answered Updated
2024/2025
Serial Bonds - correct answer repmt method in which a few bonds are paid off
each year over a series of years (interest due is lower each year because the
outstanding principal is reduced each year)
Level debt service - correct answer amount paid for principal and interest
about the same each year
Term bonds - correct answer *interest only until final year bond due (ex., 20 yr
bond for $10M, would pay interest only for years 1-19, then $10M plus interest in
year 20)
Requires sinking fund to deposit repmt amount annually
Zero coupon bonds - correct answer *gov't makes no payments (prin or int)
until bond is due
*requires sinking fund
Financing Authorities - correct answer ex., MBA - legally separate entity
vested with the power to issue debt only for a particular government, repaid by
the gov't via "rental payments" equal to the amount of the debt service on the
bonds
Budgetary accounting systems - correct answer prospective in nature (looking
to the future year)
State/local equation:
,Est beg fund balance +
Est revenues =
Amount available for appropriation -
Appropriations =
Est ending fund balance
Federal equation:
Budget resources = status of budgetary resources
Appropriations = unobligated less obligated
Financial accounting systems - correct answer retrospective in nature (focus
on what happened)
Assets = Liabilities + Fund Balance (net position)
Obligations (federal) and Encumbrances (state/local) - correct answer
encumbrance created by purchase order and reversed when goods/services
received and payable is established
Obligation is handled differently
Budgetary reporting - correct answer budget status report - prepared on
budget basis of accounting (an encumbrance is treated the same as an
expenditure).
Focus on unexpended balance - the amount available for future spending
,Revenue forecasting - correct answer depends on the type of revenue
*regression analysis, marginal utility analysis, pay-off matrix, present value
analysis, or simply compare avg growth rates over a previous period of time,
adjusting for known economic factors
Expenditure forecasting - correct answer depends on type of expense
For example, personnel projections should take into account salary schedules,
projected retirements, and attrition analysis (based on historical information)
Operating costs - discretionary
Capital costs - even more discretionary, can be postponed during downturns
Debt service - not discretionary
Budget monitoring - centralized control - correct answer 1) assessment of gov't
performance
2) evaluate relevance of priorities for delivery of services
** also ensures that revenues are inline with projections, and if not, that
necessary reductions are made so no end of year deficit (ex., executive order
from governor/mayor mandating cuts)
Apportionment and Allotment - correct answer budget apportionment made by
OMB to depts (often made quarterly to ensure funds are available for the entire
year)
, Allotments made by depts to operating units or program
Unspent $$ - some gov't allow dept to roll unused allotments to following year.
Sometimes moved to unalloted account at end of quarter, requiring approval
before moving to a different budget category
Vacancy controls - correct answer central mgmt tool involving controlling the
hiring of personnel, ability to place a hiring freeze (ex. Only mission critical
position filled)
Vacancy = opportunity to evaluate the need for the position, the position
duties/classification, etc.
Bases of Accounting - correct answer *Deals with the recognition of financial
transactions or events
1) Cash:
No recognition of receivables or payables, reflects only inflows and outflows of
cash
2) Accrual: (federal gov't)
Revenues are reported in the period they are earned and expenses are reported
in the period they are incurred, tax/grant revenue reported when due, revenue
received prior to being due is deferred, prepaid expenses are assets until
incurred, inventory is an asset until consumed (used by fed gov't, businesses,
and locals for business type funds)
3) Modified Accrual: (state and locals)
Revenues are recognized when they become "measurable" and "available" to
fund expenditures in the current period.
Measurable = amount can be determined
