Accounting and Finance Flashcards

What is the primary purpose of the Federal Accounting Standards Advisory Board (FASAB)?

Answer: To establish and improve federal financial accounting standards

The Federal Accounting Standards Advisory Board (FASAB) is responsible for developing and issuing accounting standards for the U.S. federal government. These standards ensure consistent, transparent, and reliable financial reporting across federal agencies, providing a common framework for financial accountability.

Which report provides a comprehensive overview of an agency's financial position, including assets, liabilities and net position?

Answer: Balance Sheet

The Balance Sheet is a fundamental financial statement that presents an agency's financial position at a specific point in time. It provides a snapshot of its assets (what it owns), liabilities (what it owes), and net position (the difference between assets and liabilities), offering a comprehensive overview of its financial health.

What is the primary objective of internal controls in federal financial management?

Answer: To prevent fraud, waste and abuse

The primary objective of internal controls in federal financial management is to safeguard assets, ensure the reliability of financial reporting, and promote operational efficiency and adherence to laws and regulations. This ultimately serves to prevent and detect fraud, waste, and abuse of government resources.

Which of the following is considered a corrective internal control?

Answer: Regular reconciliation of accounts

Corrective internal controls are designed to detect and correct errors or irregularities that have already occurred. Regular reconciliation of accounts, such as comparing bank statements to ledger balances, helps identify discrepancies and allows for timely correction, thus acting as a corrective measure.

What is the purpose of the Anti-Deficiency Act?

Answer: To ensure federal agencies do not spend more than their appropriations

The Anti-Deficiency Act is a cornerstone of federal appropriations law, prohibiting federal agencies from obligating or expending funds in excess of their appropriated amounts. It also prevents agencies from accepting voluntary services or making expenditures in advance of appropriations, thereby ensuring fiscal discipline and preventing unauthorized spending.