CDFM Accounting and Financial Reporting 3

Question 1

In DoD financial management, what does the term 'unliquidated obligation' (ULO) represent?

Accepted Answer

Obligated amounts for which disbursement has not yet occurred

Answer

An unliquidated obligation is an amount obligated but not yet paid; it reduces available budget authority until disbursement or deobligation occurs.

Question 2

What is the key distinction between 'expired' and 'canceled' appropriations under federal budget law?

Accepted Answer

Expired funds retain their unobligated balances for 5 years; canceled balances are withdrawn

Answer

Expired appropriations retain unobligated balances for 5 years to liquidate valid obligations; after that, balances are canceled and returned to Treasury.

Question 3

Which document serves as the primary source for recording obligations in the DoD accounting system?

Accepted Answer

Obligation document or contract award

Answer

Obligations are formally recorded upon execution of a legal obligation such as a contract award, purchase order, or similar obligating document.

Question 4

Under SFFAS No. 5, which of the following is classified as a contingent liability that must be recognized on the balance sheet?

Accepted Answer

A probable loss from litigation where the amount can be reasonably estimated

Answer

SFFAS No. 5 requires recognition of a contingent liability when a loss is probable and the amount can be reasonably estimated.

Question 5

In the DoD's General Fund financial statements, 'Fund Balance with Treasury' represents:

Accepted Answer

The agency's account balance maintained at the U.S. Treasury

Answer

Fund Balance with Treasury is an asset representing the agency's remaining available budget held by the U.S. Treasury, not a commercial bank account.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Accounting and Financial Reporting 3