CGFM Governmental Financial Reporting Standards 3

Question 1

Which GASB statement introduced the concept of major funds for state and local governments?

Accepted Answer

GASB Statement No. 34

Answer

GASB Statement No. 34 introduced the concept of major funds, requiring governments to present separate financial statements for each major governmental and enterprise fund.

Question 2

Under GASB standards, when is a governmental fund considered a 'major fund'?

Accepted Answer

When it meets specific quantitative thresholds related to total assets, liabilities, revenues, or expenditures

Answer

A fund is major if it meets both a 10% criterion (10% of total for its fund category) and a 5% criterion (5% of aggregate total for both categories combined).

Question 3

What is the purpose of note disclosures in a government's financial statements?

Accepted Answer

To provide detailed information about specific transactions and policies that cannot be found in the statements themselves

Answer

Note disclosures provide essential information about accounting policies, significant transactions, and other details necessary for understanding the financial statements.

Question 4

Which governmental accounting concept requires that resources must be legally or contractually restricted to be reported in a special revenue fund?

Accepted Answer

GASB Statement No. 54

Answer

GASB Statement No. 54 clarified that special revenue funds should only be used when the primary revenue source is restricted or committed for a specific purpose.

Question 5

What is 'government-wide' reporting designed to accomplish?

Accepted Answer

Show the overall financial position of the government including all long-term assets and liabilities

Answer

Government-wide reporting provides a comprehensive economic view, consolidating all governmental and business-type activities to show total assets, liabilities, and net position.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Governmental Financial Reporting Standards 3