CDFM Budget and Cost Analysis 4

Question 1

What is 'inflation' versus 'real growth' in the context of DoD budget analysis?

Accepted Answer

Inflation accounts for price level changes; real growth reflects actual increases in purchasing power or quantity

Answer

In budget analysis, inflation adjustments account for changes in price levels (purchasing power erosion), while real growth represents genuine increases in the quantity of resources or capability funded.

Question 2

What is the purpose of a 'crosswalk' in DoD budget analysis?

Accepted Answer

A table that reconciles differences in format between two budget presentations of the same data

Answer

A crosswalk is an analytical table that maps or reconciles data presented in one format or organizational structure to another, enabling comparison between budget versions or between budget and program data.

Question 3

Under DoD 7000.14-R (FMR), which event formally records an obligation in the accounting system?

Accepted Answer

A binding legal agreement such as a signed contract or purchase order

Answer

An obligation is recorded when the government enters into a legally binding agreement (contract, order, grant, etc.) that will require payment, not at delivery or invoicing.

Question 4

What distinguishes a 'reprogramming' action from a 'transfer' in DoD budget execution?

Accepted Answer

Reprogramming moves funds within an appropriation; transfer moves funds between appropriations

Answer

A reprogramming realigns funds within the same appropriation account, while a transfer moves funds between different appropriation accounts and generally requires statutory authority.

Question 5

In parametric cost estimating, what is the main advantage over the analogous estimating method?

Accepted Answer

It uses statistical relationships to scale estimates, providing greater objectivity for systems without direct analogs

Answer

Parametric estimating uses mathematically derived CERs based on historical data to scale cost by technical parameters, offering more objectivity and scalability than simple analogy when exact analogs are unavailable.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Budget and Cost Analysis 4