CGFM Exam 1- Study Guide Questions
and Correct Answers Latest 2026-2027
AGA - CORRECT ANSWERS-Association of Government Accountants
CEAR - CORRECT ANSWERS-Certificate of Excellence in Accountability Reporting
CFO - CORRECT ANSWERS-Chief Financial Officer
CGFM - CORRECT ANSWERS-Certified Government Financial Manager
ERP - CORRECT ANSWERS-Enterprise Resource Planning
FASAB - CORRECT ANSWERS-Federal Accounting Standards Advisory Board
FASB - CORRECT ANSWERS-Financial Accounting Standards Board
FSIO - CORRECT ANSWERS-Financial Systems Integration Office (within GSA)
GAAP - CORRECT ANSWERS-Generally Accepted Accounting Principles
GAO - CORRECT ANSWERS-Government Accountibility Office
GASB - CORRECT ANSWERS-Government Accounting Standards Board
GPRA - CORRECT ANSWERS-Government Performance and Results Act
OMB - CORRECT ANSWERS-Office of Management and Budget
PAR - CORRECT ANSWERS-Performance and Accountability Report
SEA - CORRECT ANSWERS-Service Efforts and Accomplishments
Accountability - CORRECT ANSWERS-Principle that in a democracy, government
operates at the consent of the people. Therefore it must answer to the people for its actions
and results, including the taking and using of the people's resources.
Allotments - CORRECT ANSWERS-In the federal government, an agency's distribution of
apportioned budgetary authority to various components within the agency. After the
,executive agency receives its apportionment, it allots budgetary authority to specific
components within the agency.
Anti-Deficiency Act - CORRECT ANSWERS-At the federal level, a law stating that officials
can be fined and/or jailed if they obligate the government to spend funds beyond the legally
authorized purpose, time, or amount.
Apportionmnets - CORRECT ANSWERS-Definitions may vary at different levels of
government. At the federal level, OMB's approval to use a protion of the legislatively
approved budgetary authority.
Appropriated Budget - CORRECT ANSWERS-Budget that has been passed by the
legistlative branch; has effect of law.
Appropriation - CORRECT ANSWERS-A legistlative enactment (law, statute or
ordinance) that creates spending authority; the legal authority to incur expenses and
spend money.
Attestation engagements - CORRECT ANSWERS-Engagement primarily concerned with
examining or performing agreed upon procedures on a subject matter, or an assertion
about a subject matter, and reporting on the results. The subject matter may be financial or
nonfinancial and can be part of a financial audit or performance audit. Possible subjects
include reporting on an entity's internal controls, compliance with law or performance
measures.
Authorization - CORRECT ANSWERS-Legislative enactment that approves programs;
prescribes what activities an agency may pursue if funding is available.
Block grants - CORRECT ANSWERS-Intergovernmental provision of resources for
broadly defined purposes. Contrasts with category grants.
Capital Budget - CORRECT ANSWERS-Forecasts and controls spending for "big ticket"
items that are acquired and used over a period of several years, such as construction
projects and major equipment purchases. Used at state and local levels.
Capital lease - CORRECT ANSWERS-Capital leases is a lease fo real property that meets
defined criteria requiring the government to report the property as it purchased long term
debt
Cash-flow budget - CORRECT ANSWERS-Forecasts the timing as well as amount of cash
flows for the year. Used to project required cash levels.
Category grants - CORRECT ANSWERS-Intergovernmental provision of resources to be
used for activities in a specific category of purpose. May be further classified as
discretionary grants or formula grants. Contrasts with block grants.
,Central Management Agencies - CORRECT ANSWERS-Government agencies that
provide central management services to other components. Example would be a state
government hr office (that serves all state agencies) or the OMB at the federal level.
CEAR - CORRECT ANSWERS-An AGA program that helps federal agencies and their
components to produce effective, high-quality Performance and Accountability Reports
Certificate of Participation - CORRECT ANSWERS-Form of shared government financing.
In a typical form, several financial institutions share in a loan arrangement with a
government entity.
Charter - CORRECT ANSWERS-Local government version of a constitution. States may
provide for the establishment of local governments through charters
checks and balances - CORRECT ANSWERS-Process by which one branch of
government (legislative, executiv or judicial) can constrain actions of the other branches.
Flows from separation of powers.
CFO Act - CORRECT ANSWERS-1990 law that, among other provisions, requires the
federal government's major executive branch agencies to have a CFO. Prescribes duties
and reporting requirements, and requires audited financial statements
Commissions - CORRECT ANSWERS-Government components established by law,
statuted or ordinance. May be permanent or temporary. Because they are established by
law, may have greater autonomy and authority than government components that are
administratively established. Ex. Federal Communication Commision
Components - CORRECT ANSWERS-Organized units of government such as agencies,
offices and departments. Found in all branches of government at all levels.
Conflict of interest - CORRECT ANSWERS-Arises when one has personal interest in
matters relating to official duties or activities. Such conflicts can destroy objectivity and
independence and prevent the exercise of due care
Consumption Taxes - CORRECT ANSWERS-Broad category of tax that includes sales,
use, excise and value-added taxes
Continuity of Operations - CORRECT ANSWERS-Refers to the efforts to ensure the
organization can sustain essential operations regardless of planned or unplanned
incidents or disruptions.
Covenant (bond) - CORRECT ANSWERS-Legal requirements pertaining to a specific
bond issue. Typically define the maturity date, revenue stream that will be used to repay
the debt, interest rate and repayment schedule. May require a sinking fund and may
specify conditions that must be met before new debt can be issued.
, Credit-rating agencies - CORRECT ANSWERS-Independent organizations that assess
the credit worthiness of debt. Three major rating agenciew are Standard & Poors, Moody's
Investor Service and Fitches rating
Data mining - CORRECT ANSWERS-Using special, computer-based techniques such as
filters and algorithms to extract meaningful information from large bodies of data
Debt - CORRECT ANSWERS-Money owed by the entity to individual or organizational
creditors, ususally as a result of planned short- or long-term borrowing to finance
government objectives
Dedicated tax - CORRECT ANSWERS-Taxes levied to finance a specific activity.
Proceeds are deposited into an account restricted to that activity. Also referred to as
earmarked or restricted taxes.
Deficit - CORRECT ANSWERS-Occurs when government expenditures for a specific
fiscal period exceed revenues and/or financial resource inflows.
Diligence - CORRECT ANSWERS-Pursuing an event, action or assignment to a timely
and sufficient end or close
Discrestionary grants - CORRECT ANSWERS-Form of category grant. Transfers funds
between governments for a specific purpose; whether a grant is awarded and the amount
of the award depend on discretion of the entity providing the funds
Donations - CORRECT ANSWERS-Voluntary contributions that confer no rights or
benefits on the giver
Due care - CORRECT ANSWERS-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 ANSWERS-Variation on use of special funds. Revenue from
specific taxes or other sources is set aside for specific activities. One example is the
earmarking of gasoline taxes for highway improvements
Enterprise Resoure Planning System - CORRECT ANSWERS-Major "end-to-end"
computer system that links many functions and departments. Used to simplify and
streamline financial management, and to integrate operation with financial management
Estate tax - CORRECT ANSWERS-Form of wealth tax. Levied on the estate of the
deceased person before assets are distributed to heirs
Ethics - CORRECT ANSWERS-A set of moral principles and values; the principles of
conduct governing an individual or a (professional) group. A complex system of discipline
and Correct Answers Latest 2026-2027
AGA - CORRECT ANSWERS-Association of Government Accountants
CEAR - CORRECT ANSWERS-Certificate of Excellence in Accountability Reporting
CFO - CORRECT ANSWERS-Chief Financial Officer
CGFM - CORRECT ANSWERS-Certified Government Financial Manager
ERP - CORRECT ANSWERS-Enterprise Resource Planning
FASAB - CORRECT ANSWERS-Federal Accounting Standards Advisory Board
FASB - CORRECT ANSWERS-Financial Accounting Standards Board
FSIO - CORRECT ANSWERS-Financial Systems Integration Office (within GSA)
GAAP - CORRECT ANSWERS-Generally Accepted Accounting Principles
GAO - CORRECT ANSWERS-Government Accountibility Office
GASB - CORRECT ANSWERS-Government Accounting Standards Board
GPRA - CORRECT ANSWERS-Government Performance and Results Act
OMB - CORRECT ANSWERS-Office of Management and Budget
PAR - CORRECT ANSWERS-Performance and Accountability Report
SEA - CORRECT ANSWERS-Service Efforts and Accomplishments
Accountability - CORRECT ANSWERS-Principle that in a democracy, government
operates at the consent of the people. Therefore it must answer to the people for its actions
and results, including the taking and using of the people's resources.
Allotments - CORRECT ANSWERS-In the federal government, an agency's distribution of
apportioned budgetary authority to various components within the agency. After the
,executive agency receives its apportionment, it allots budgetary authority to specific
components within the agency.
Anti-Deficiency Act - CORRECT ANSWERS-At the federal level, a law stating that officials
can be fined and/or jailed if they obligate the government to spend funds beyond the legally
authorized purpose, time, or amount.
Apportionmnets - CORRECT ANSWERS-Definitions may vary at different levels of
government. At the federal level, OMB's approval to use a protion of the legislatively
approved budgetary authority.
Appropriated Budget - CORRECT ANSWERS-Budget that has been passed by the
legistlative branch; has effect of law.
Appropriation - CORRECT ANSWERS-A legistlative enactment (law, statute or
ordinance) that creates spending authority; the legal authority to incur expenses and
spend money.
Attestation engagements - CORRECT ANSWERS-Engagement primarily concerned with
examining or performing agreed upon procedures on a subject matter, or an assertion
about a subject matter, and reporting on the results. The subject matter may be financial or
nonfinancial and can be part of a financial audit or performance audit. Possible subjects
include reporting on an entity's internal controls, compliance with law or performance
measures.
Authorization - CORRECT ANSWERS-Legislative enactment that approves programs;
prescribes what activities an agency may pursue if funding is available.
Block grants - CORRECT ANSWERS-Intergovernmental provision of resources for
broadly defined purposes. Contrasts with category grants.
Capital Budget - CORRECT ANSWERS-Forecasts and controls spending for "big ticket"
items that are acquired and used over a period of several years, such as construction
projects and major equipment purchases. Used at state and local levels.
Capital lease - CORRECT ANSWERS-Capital leases is a lease fo real property that meets
defined criteria requiring the government to report the property as it purchased long term
debt
Cash-flow budget - CORRECT ANSWERS-Forecasts the timing as well as amount of cash
flows for the year. Used to project required cash levels.
Category grants - CORRECT ANSWERS-Intergovernmental provision of resources to be
used for activities in a specific category of purpose. May be further classified as
discretionary grants or formula grants. Contrasts with block grants.
,Central Management Agencies - CORRECT ANSWERS-Government agencies that
provide central management services to other components. Example would be a state
government hr office (that serves all state agencies) or the OMB at the federal level.
CEAR - CORRECT ANSWERS-An AGA program that helps federal agencies and their
components to produce effective, high-quality Performance and Accountability Reports
Certificate of Participation - CORRECT ANSWERS-Form of shared government financing.
In a typical form, several financial institutions share in a loan arrangement with a
government entity.
Charter - CORRECT ANSWERS-Local government version of a constitution. States may
provide for the establishment of local governments through charters
checks and balances - CORRECT ANSWERS-Process by which one branch of
government (legislative, executiv or judicial) can constrain actions of the other branches.
Flows from separation of powers.
CFO Act - CORRECT ANSWERS-1990 law that, among other provisions, requires the
federal government's major executive branch agencies to have a CFO. Prescribes duties
and reporting requirements, and requires audited financial statements
Commissions - CORRECT ANSWERS-Government components established by law,
statuted or ordinance. May be permanent or temporary. Because they are established by
law, may have greater autonomy and authority than government components that are
administratively established. Ex. Federal Communication Commision
Components - CORRECT ANSWERS-Organized units of government such as agencies,
offices and departments. Found in all branches of government at all levels.
Conflict of interest - CORRECT ANSWERS-Arises when one has personal interest in
matters relating to official duties or activities. Such conflicts can destroy objectivity and
independence and prevent the exercise of due care
Consumption Taxes - CORRECT ANSWERS-Broad category of tax that includes sales,
use, excise and value-added taxes
Continuity of Operations - CORRECT ANSWERS-Refers to the efforts to ensure the
organization can sustain essential operations regardless of planned or unplanned
incidents or disruptions.
Covenant (bond) - CORRECT ANSWERS-Legal requirements pertaining to a specific
bond issue. Typically define the maturity date, revenue stream that will be used to repay
the debt, interest rate and repayment schedule. May require a sinking fund and may
specify conditions that must be met before new debt can be issued.
, Credit-rating agencies - CORRECT ANSWERS-Independent organizations that assess
the credit worthiness of debt. Three major rating agenciew are Standard & Poors, Moody's
Investor Service and Fitches rating
Data mining - CORRECT ANSWERS-Using special, computer-based techniques such as
filters and algorithms to extract meaningful information from large bodies of data
Debt - CORRECT ANSWERS-Money owed by the entity to individual or organizational
creditors, ususally as a result of planned short- or long-term borrowing to finance
government objectives
Dedicated tax - CORRECT ANSWERS-Taxes levied to finance a specific activity.
Proceeds are deposited into an account restricted to that activity. Also referred to as
earmarked or restricted taxes.
Deficit - CORRECT ANSWERS-Occurs when government expenditures for a specific
fiscal period exceed revenues and/or financial resource inflows.
Diligence - CORRECT ANSWERS-Pursuing an event, action or assignment to a timely
and sufficient end or close
Discrestionary grants - CORRECT ANSWERS-Form of category grant. Transfers funds
between governments for a specific purpose; whether a grant is awarded and the amount
of the award depend on discretion of the entity providing the funds
Donations - CORRECT ANSWERS-Voluntary contributions that confer no rights or
benefits on the giver
Due care - CORRECT ANSWERS-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 ANSWERS-Variation on use of special funds. Revenue from
specific taxes or other sources is set aside for specific activities. One example is the
earmarking of gasoline taxes for highway improvements
Enterprise Resoure Planning System - CORRECT ANSWERS-Major "end-to-end"
computer system that links many functions and departments. Used to simplify and
streamline financial management, and to integrate operation with financial management
Estate tax - CORRECT ANSWERS-Form of wealth tax. Levied on the estate of the
deceased person before assets are distributed to heirs
Ethics - CORRECT ANSWERS-A set of moral principles and values; the principles of
conduct governing an individual or a (professional) group. A complex system of discipline
