CDFM Working Capital Fund Management 2

Question 1

What is the key distinction between a WCF appropriation and a direct appropriation?

Accepted Answer

WCF appropriations are revolving and replenished by customer receipts; direct appropriations are one-time congressional grants

Answer

WCF appropriations expire at the end of the fiscal year, while direct appropriations do not

Answer

Direct appropriations require OMB approval before obligation; WCF appropriations do not

Answer

WCF appropriations can only be used for personnel costs

Question 2

In DoD WCF management, what does 'break-even' mean?

Accepted Answer

Revenues collected equal total costs incurred over a two-year budget cycle

Answer

The fund's total assets equal total liabilities

Answer

The number of customers equals the number of employees

Answer

Operating costs are split equally between the Army, Navy, and Air Force

Question 3

Which entity sets the prices (stabilized rates) charged by WCF business areas to their customers?

Accepted Answer

The DoD Comptroller in coordination with each Military Department

Answer

The Office of Management and Budget (OMB) alone

Answer

Congress through the annual defense authorization act

Answer

The Federal Acquisition Regulatory Council

Question 4

What happens when a WCF business area accumulates a large net operating gain (surplus)?

Accepted Answer

Rates must be reduced in future years to return the surplus to customers

Answer

The surplus is transferred to the General Fund of the Treasury

Answer

The surplus is used to fund new weapon system development

Answer

The surplus is distributed to WCF employees as bonuses

Question 5

The Defense Logistics Agency (DLA) Supply Chain activity group primarily finances its operations through:

Accepted Answer

Revolving fund revenues from sales of supplies and materiel to customers

Answer

Annual direct appropriations from Congress

Answer

Grants from the Department of Commerce

Answer

User fees collected at military commissaries

Question 6

Which financial statement is most critical for assessing the cash position and liquidity of a DoD WCF business area?

Accepted Answer

Statement of Cash Flows

Answer

Statement of Net Cost

Answer

Statement of Changes in Net Position

Answer

Statement of Budgetary Resources

Question 7

Under DoD WCF policy, capital assets purchased by a WCF activity are generally funded through:

Accepted Answer

Operating costs recovered through customer rates over the asset's useful life (depreciation)

Answer

A separate line item in the Military Construction appropriation

Answer

One-time congressional supplemental appropriations

Answer

Transfers from the Defense Emergency Response Fund