CGFM CGFM 2 — Questions and Answers
Question 1: Under GASB standards, which fund type uses the economic resources measurement focus?
- General Fund
- Proprietary funds (Correct answer)
- Special revenue funds
- Capital projects funds
Correct answer: Proprietary funds
Proprietary funds use the economic resources measurement focus and accrual basis of accounting, similar to business enterprises.
Question 2: Which of the following is NOT a component of the federal government's Comprehensive Annual Financial Report (CAFR)?
- Management's Discussion and Analysis
- Government-wide financial statements
- Statistical section
- Program budget justification (Correct answer)
Correct answer: Program budget justification
Program budget justifications are budget documents submitted to Congress, not components of a CAFR.
Question 3: The Single Audit Act requires audits of federal award recipients that expend at least how much in federal awards in a fiscal year?
- $500,000
- $750,000 (Correct answer)
- $1,000,000
- $250,000
Correct answer: $750,000
The 2016 OMB threshold requires a single audit when federal expenditures reach $750,000 or more in a fiscal year.
Question 4: A government agency estimates it will receive $2 million in tax revenue but only $1.8 million is actually collected. The $200,000 variance is best described as:
- An encumbrance
- A budget shortfall (Correct answer)
- An expenditure variance
- An allotment lapse
Correct answer: A budget shortfall
A budget shortfall occurs when actual revenues fall below estimated revenues, resulting in a negative variance.
Question 5: Which internal control component in the COSO framework addresses the organization's response to identified risks?
- Control environment
- Risk assessment
- Control activities (Correct answer)
- Risk response
Correct answer: Control activities
Control activities are the policies and procedures that help ensure management's risk responses are carried out effectively.
Question 6: In governmental accounting, an 'encumbrance' represents:
- A completed expenditure charged to an appropriation
- A commitment of funds for a future obligation (Correct answer)
- An unearned revenue liability
- A long-term debt instrument
Correct answer: A commitment of funds for a future obligation
Encumbrances represent commitments related to unperformed contracts or purchase orders that reserve budget authority.
Question 7: Which federal act established the Chief Financial Officers (CFO) Act requirements for federal agencies?
- Government Performance and Results Act of 1993
- Chief Financial Officers Act of 1990 (Correct answer)
- Federal Financial Management Improvement Act of 1996
- Antideficiency Act
Correct answer: Chief Financial Officers Act of 1990
The CFO Act of 1990 established CFO positions in 24 major federal agencies and required audited financial statements.
CGFM CGFM 2
Under GASB standards, which fund type uses the economic resources measurement focus?