CDFM Accounting and Financial Reporting 5

Question 1

Which federal accounting standard establishes the hierarchy of accounting standards applicable to federal entities?

Accepted Answer

SFFAS No. 34

Answer

SFFAS No. 1

Answer

OMB Circular A-136

Answer

FASAB Handbook

Question 2

In DoD's two-phase budget execution process, 'commitment' refers to:

Accepted Answer

An administrative reservation of funds in anticipation of an obligation

Answer

A legally binding agreement with a vendor

Answer

Funds that have been disbursed to a contractor

Answer

The apportionment of funds by OMB

Question 3

Under SFFAS No. 7, exchange revenues in the federal government are recognized when:

Accepted Answer

The government provides goods, services, or assets and is entitled to consideration

Answer

An appropriation is received

Answer

Cash is collected from the buyer

Answer

Congress authorizes the fee or price

Question 4

What is the primary difference between 'gross cost' and 'net cost' as presented on the Statement of Net Cost?

Accepted Answer

Net cost equals gross cost minus earned revenues

Answer

Gross cost includes depreciation; net cost excludes it

Answer

Gross cost is budgetary; net cost is proprietary

Answer

Net cost is reported before interest expense; gross cost includes it

Question 5

A DoD auditor finds that disbursements were recorded in the wrong appropriation account. This error most directly affects which financial statement assertion?

Accepted Answer

Accuracy and valuation

Answer

Completeness

Answer

Presentation and disclosure

Answer

Existence

Question 6

Which OMB document governs the form and content of federal agency Performance and Accountability Reports (PARs)?

Accepted Answer

OMB Circular A-136

Answer

OMB Circular A-11

Answer

OMB Circular A-123

Answer

OMB Bulletin 14-02

Question 7

In the context of DoD financial statement audits, a 'material weakness' in internal controls means:

Accepted Answer

One or more deficiencies that create a reasonable possibility of a material misstatement not being prevented or detected

Answer

A minor error that does not affect financial decisions

Answer

A significant deficiency that could result in a misstatement of financial statements

Answer

A deficiency in IT security controls only