AAAE ACE Finance Module 2
Accounting - answer To properly record and report any and all activities that have some
financial value or impact.
Cash Basis - answer Revenues and expenses are recorded when cash is received or
cash is paid only.
Accrual Basis - answer Transactions are recorded in the period that they occur
regardless of when cash is paid or received. Considered the most reflective of business
activities.
Modified Accrual Basis - answer Expenses are recorded when incurred and revenues
are recorded once they are measurable and available. Developed for and primarily used
by government entities to reflect the funding and operating differences between
government and private organizations.
Fixed Assets - answerNon-monetary assets that are expected to have a useful life of
more than one year, are acquired for use in the operation of the airport, and are not
intended for resale. Land, buildings, vehicles, etc.
Internal Service Funds - answerFunds used to collect the costs of the function provided
to other units of the government and allocate costs on a defined basis.
True - answerTrue/False - Airports are required to report all intergovernmental service
annually to the FAA.
Double-Entry Method - answerFor each transaction, there is at least one account
debited and one or more accounts credited, with debits equaling credits.
Chart of Accounts - answerThe list of all accounts used in recording transactions
(therefore in the airport's general ledger).
Governmental Accounting Standard Board (GASB) - answerOversees accounting and
financial reporting standards for US state and local governments.
Generally Accepted Accounting Principles (GAAP) - answer_____ includes principles
on recognition, measurement, presentation, disclosure. Standards prescribed by
FASB/GASB.
Enterprise Resource Planning (ERP) Systems - answerTechniques and concepts for
integrated management of businesses as a whole from the viewpoint of the effective
, use of management resources to improve the efficiency of enterprise management.
Intent - to replace stand-alone systems that perform specific functions and integrate
them into one single computer system that performs all or most of those functions.
Budget - answerA forecast of revenues and expenses for a specific period of time.
Capital Budgets - answerAddress items that are viewed as investments in assets that
have useful lives extending beyond a single fiscal year and exceeding a certain value
(as determined by the airport's capitalization policy).
Operating Budgets - answerFocus on revenues and expenses that result from the day-
to-day operations of the airport.
The Budget Cycle - answerThe process that can be summarized as: planning,
preparation, approval, execution (or expenditure), analysis, audit.
Top-Down Budgeting - answerExecutive management sets forth the budget goal and
managers and staff have little input over what gets budgeted and how much.
Bottom-Up Budgeting - answerManagers and staff put together the budget with limited
input or guidance from executive management and those recommendations are rolled
up with little adjustment.
Incremental Budgeting - answerOne of the most common forms of budgeting; takes the
previous year or period's actual numbers and adjusts those figures by a predetermined
percentage.
Zero-Based Budgeting (ZBB) - answerA process that assumes the budget for each year
has no historical information and all items must be justified on their own.
Management by Objectives (MBO) - answerResults-oriented budgeting technique;
focuses on creating a budget with the end vision of achieving the outlined objectives
and working backwards to the budget line items that support those objectives.
Activity-Based Budgeting (ABB) - answerFocuses on the activities of the airport to
determine budget amounts rather than the functions of the airport.
Government Finance Officers Association (GFOA) - answerRepresents public finance
officials throughout the US and Canada, mission is "to advance excellence in public
finance."
True - answerTrue/False - The information recorded is useless if it is not able to be
conveyed, in a beneficial manner, to stakeholders within and outside of the airport
organization.
Accounting - answer To properly record and report any and all activities that have some
financial value or impact.
Cash Basis - answer Revenues and expenses are recorded when cash is received or
cash is paid only.
Accrual Basis - answer Transactions are recorded in the period that they occur
regardless of when cash is paid or received. Considered the most reflective of business
activities.
Modified Accrual Basis - answer Expenses are recorded when incurred and revenues
are recorded once they are measurable and available. Developed for and primarily used
by government entities to reflect the funding and operating differences between
government and private organizations.
Fixed Assets - answerNon-monetary assets that are expected to have a useful life of
more than one year, are acquired for use in the operation of the airport, and are not
intended for resale. Land, buildings, vehicles, etc.
Internal Service Funds - answerFunds used to collect the costs of the function provided
to other units of the government and allocate costs on a defined basis.
True - answerTrue/False - Airports are required to report all intergovernmental service
annually to the FAA.
Double-Entry Method - answerFor each transaction, there is at least one account
debited and one or more accounts credited, with debits equaling credits.
Chart of Accounts - answerThe list of all accounts used in recording transactions
(therefore in the airport's general ledger).
Governmental Accounting Standard Board (GASB) - answerOversees accounting and
financial reporting standards for US state and local governments.
Generally Accepted Accounting Principles (GAAP) - answer_____ includes principles
on recognition, measurement, presentation, disclosure. Standards prescribed by
FASB/GASB.
Enterprise Resource Planning (ERP) Systems - answerTechniques and concepts for
integrated management of businesses as a whole from the viewpoint of the effective
, use of management resources to improve the efficiency of enterprise management.
Intent - to replace stand-alone systems that perform specific functions and integrate
them into one single computer system that performs all or most of those functions.
Budget - answerA forecast of revenues and expenses for a specific period of time.
Capital Budgets - answerAddress items that are viewed as investments in assets that
have useful lives extending beyond a single fiscal year and exceeding a certain value
(as determined by the airport's capitalization policy).
Operating Budgets - answerFocus on revenues and expenses that result from the day-
to-day operations of the airport.
The Budget Cycle - answerThe process that can be summarized as: planning,
preparation, approval, execution (or expenditure), analysis, audit.
Top-Down Budgeting - answerExecutive management sets forth the budget goal and
managers and staff have little input over what gets budgeted and how much.
Bottom-Up Budgeting - answerManagers and staff put together the budget with limited
input or guidance from executive management and those recommendations are rolled
up with little adjustment.
Incremental Budgeting - answerOne of the most common forms of budgeting; takes the
previous year or period's actual numbers and adjusts those figures by a predetermined
percentage.
Zero-Based Budgeting (ZBB) - answerA process that assumes the budget for each year
has no historical information and all items must be justified on their own.
Management by Objectives (MBO) - answerResults-oriented budgeting technique;
focuses on creating a budget with the end vision of achieving the outlined objectives
and working backwards to the budget line items that support those objectives.
Activity-Based Budgeting (ABB) - answerFocuses on the activities of the airport to
determine budget amounts rather than the functions of the airport.
Government Finance Officers Association (GFOA) - answerRepresents public finance
officials throughout the US and Canada, mission is "to advance excellence in public
finance."
True - answerTrue/False - The information recorded is useless if it is not able to be
conveyed, in a beneficial manner, to stakeholders within and outside of the airport
organization.
