CGAP Government Financial Management 1

Question 1

Which accounting basis does the U.S. federal government primarily use for its consolidated financial statements?

Accepted Answer

Full accrual basis

Answer

The U.S. federal government uses full accrual accounting for its consolidated financial statements as required by federal accounting standards.

Question 2

What does the Antideficiency Act prohibit U.S. federal agencies from doing?

Accepted Answer

Obligating funds in excess of amounts appropriated

Answer

The Antideficiency Act prohibits federal agencies from obligating or expending funds beyond what Congress has appropriated.

Question 3

Which body sets accounting and financial reporting standards for U.S. federal entities?

Accepted Answer

FASAB

Answer

The Federal Accounting Standards Advisory Board (FASAB) establishes generally accepted accounting principles for federal reporting entities.

Question 4

In government budgeting, what is an 'obligation'?

Accepted Answer

A legally binding commitment that will require future outlays

Answer

An obligation is a legally binding act that commits the government to make a payment once conditions are met, such as signing a contract.

Question 5

Which financial statement is unique to the U.S. federal government and not found in state/local reporting?

Accepted Answer

Statement of Net Cost

Answer

The Statement of Net Cost reports the net cost of operations for federal programs and is specific to the federal reporting model.

CGAP - Certified Government Auditing Professional Practice Test