ACCT 4421 Governmental Chapter 3
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are the key financial document for governments? - CORRECT ANSWER - Budgets
What are the three key purposes of Budgets? - CORRECT ANSWER - 1. Planning
2. Controlling and Administering
3. Reporting and Evaluating
General Fund/ Special Revenue Funds usually require a ________________________ before
taxes are collected and expenditures made. - CORRECT ANSWER - Legally adopted
budget
________________________ may exist for failure to comply with the budget - CORRECT
ANSWER - Severe penalties
What are the budget classifications? - CORRECT ANSWER - 1. Expenditures
2. Revenues
Ex. General fund, special revenue fund, etc. - CORRECT ANSWER - Fund
a group of activities carried out with the same objective . Ex. General government, public safety,
sanitation, etc. - CORRECT ANSWER - Function or Program
Ex. Police department, fire department, etc. - CORRECT ANSWER - Organization Unit
A line of work contributing to a function or program. Ex. Highway patrol, burglary
investigations, etc. - CORRECT ANSWER - Activity
, The fiscal period presumed to benefit. Ex. Current, Capital, Debt Service - CORRECT
ANSWER - Character
The types of items purchased or services obtained. Ex. Salaries, fringe benefitsl, etc. -
CORRECT ANSWER - Object
• 1st classify by fund
• 2nd classify by source (taxes, special assessments, fines, charges, etc. - CORRECT
ANSWER - Revenues
What are the 4 Key Phases of Budget Cycle? - CORRECT ANSWER - • Preparation (most
commonly by executive branch)
• Legislative adoption and executive approval
• Execution (by executive branch)
• Reporting and auditing
How Do Budgets Enhance Controls? - CORRECT ANSWER - Budgetary compliance
(staying within budget) can be assured by building safeguards in the accounting systems using
journals and ledgers.
used to record the budgetary inflows and outflows estimated or authorized in the annual budget. -
CORRECT ANSWER - Budgetary Accounts
What are the 3 types of Budget Accounts - CORRECT ANSWER - 1. Estimated Revenue
2. Appropriations
3. Encumbrances
is a legal authorization granted by the legislative body to incur liabilities for purposes specified
in the appropriation act or ordinance. - CORRECT ANSWER - Appropriation Budget
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are the key financial document for governments? - CORRECT ANSWER - Budgets
What are the three key purposes of Budgets? - CORRECT ANSWER - 1. Planning
2. Controlling and Administering
3. Reporting and Evaluating
General Fund/ Special Revenue Funds usually require a ________________________ before
taxes are collected and expenditures made. - CORRECT ANSWER - Legally adopted
budget
________________________ may exist for failure to comply with the budget - CORRECT
ANSWER - Severe penalties
What are the budget classifications? - CORRECT ANSWER - 1. Expenditures
2. Revenues
Ex. General fund, special revenue fund, etc. - CORRECT ANSWER - Fund
a group of activities carried out with the same objective . Ex. General government, public safety,
sanitation, etc. - CORRECT ANSWER - Function or Program
Ex. Police department, fire department, etc. - CORRECT ANSWER - Organization Unit
A line of work contributing to a function or program. Ex. Highway patrol, burglary
investigations, etc. - CORRECT ANSWER - Activity
, The fiscal period presumed to benefit. Ex. Current, Capital, Debt Service - CORRECT
ANSWER - Character
The types of items purchased or services obtained. Ex. Salaries, fringe benefitsl, etc. -
CORRECT ANSWER - Object
• 1st classify by fund
• 2nd classify by source (taxes, special assessments, fines, charges, etc. - CORRECT
ANSWER - Revenues
What are the 4 Key Phases of Budget Cycle? - CORRECT ANSWER - • Preparation (most
commonly by executive branch)
• Legislative adoption and executive approval
• Execution (by executive branch)
• Reporting and auditing
How Do Budgets Enhance Controls? - CORRECT ANSWER - Budgetary compliance
(staying within budget) can be assured by building safeguards in the accounting systems using
journals and ledgers.
used to record the budgetary inflows and outflows estimated or authorized in the annual budget. -
CORRECT ANSWER - Budgetary Accounts
What are the 3 types of Budget Accounts - CORRECT ANSWER - 1. Estimated Revenue
2. Appropriations
3. Encumbrances
is a legal authorization granted by the legislative body to incur liabilities for purposes specified
in the appropriation act or ordinance. - CORRECT ANSWER - Appropriation Budget
