CBS CBS Government & Public Sector Budgeting 2 — Questions and Answers
Question 1: Performance-based budgeting links funding allocations to:
- The number of employees in each government agency
- Measurable program outcomes and results rather than inputs or activities (Correct answer)
- Historical spending patterns adjusted for inflation
- Congressional committee seniority and influence
Correct answer: Measurable program outcomes and results rather than inputs or activities
Performance-based budgeting ties resource allocation to demonstrated results, encouraging agencies to achieve defined outcomes efficiently.
Question 2: In state and local government accounting, GASB stands for:
- Government Accounting Standards Bureau
- Governmental Accounting Standards Board (Correct answer)
- General Audit and Standards Body
- Government Agency Standards Benchmark
Correct answer: Governmental Accounting Standards Board
GASB is the authoritative body that establishes accounting and financial reporting standards for U.S. state and local governmental entities.
Question 3: The Budget Enforcement Act framework categorizes federal spending into two broad categories. Which of the following is one of them?
- Discretionary and Mandatory spending (Correct answer)
- Capital and Operating spending
- Domestic and Defense spending
- Short-term and Long-term spending
Correct answer: Discretionary and Mandatory spending
Federal spending is divided into discretionary spending (subject to annual appropriations) and mandatory spending (governed by permanent law, e.g., Social Security, Medicare).
Question 4: An encumbrance in governmental accounting represents:
- A completed payment made to a vendor
- A reservation of funds for a purchase order or contract not yet paid (Correct answer)
- An overexpenditure that requires legislative approval
- A transfer between governmental fund accounts
Correct answer: A reservation of funds for a purchase order or contract not yet paid
Encumbrances are commitments to spend (e.g., purchase orders issued) that reduce available appropriation balance before the actual expenditure is recorded.
Question 5: Which type of government fund is used to account for resources restricted for a specific purpose by an external party?
- General Fund
- Capital Projects Fund
- Special Revenue Fund (Correct answer)
- Internal Service Fund
Correct answer: Special Revenue Fund
Special revenue funds account for revenues restricted or committed to specified purposes other than debt service or capital projects.
Question 6: The Antideficiency Act prohibits federal agencies from:
- Purchasing goods from foreign vendors without OMB approval
- Obligating or expending funds in excess of amounts appropriated by Congress (Correct answer)
- Transferring funds between programs without GAO notification
- Using prior-year balances in the current fiscal year
Correct answer: Obligating or expending funds in excess of amounts appropriated by Congress
The Antideficiency Act makes it a criminal offense for federal officials to spend or commit funds beyond what Congress has appropriated.
CBS CBS Government & Public Sector Budgeting 2
Performance-based budgeting links funding allocations to: