CGFM Governmental Financial Reporting Standards 1

Question 1

Which body establishes generally accepted accounting principles (GAAP) for state and local governments in the United States?

Accepted Answer

GASB

Answer

The Governmental Accounting Standards Board (GASB) establishes GAAP for state and local governments.

Question 2

What is the primary financial reporting document required for state and local governments under GASB Statement No. 34?

Accepted Answer

Comprehensive Annual Financial Report

Answer

GASB Statement No. 34 requires state and local governments to produce a Comprehensive Annual Financial Report (CAFR), now called the Annual Comprehensive Financial Report (ACFR).

Question 3

Under GASB standards, which basis of accounting is used for governmental funds?

Accepted Answer

Modified accrual basis

Answer

Governmental funds use the modified accrual basis of accounting, recognizing revenues when measurable and available and expenditures when the liability is incurred.

Question 4

Which GASB concept requires governments to report infrastructure assets in their government-wide financial statements?

Accepted Answer

GASB Statement No. 34

Answer

GASB Statement No. 34 introduced the requirement to report infrastructure assets at historical cost, net of accumulated depreciation, in government-wide statements.

Question 5

What does the Management's Discussion and Analysis (MD&A) section of a government's financial report provide?

Accepted Answer

An analytical overview of the government's financial activities

Answer

The MD&A provides management's analytical overview of the government's financial activities based on currently known facts, decisions, or conditions.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Governmental Financial Reporting Standards 1