CGFM Governmental Accounting and Fund Accounting 3

Question 1

Which of the following fund balance classifications under GASB 54 is the most restrictive?

Accepted Answer

Nonspendable

Answer

Nonspendable fund balance is the most restrictive classification, representing amounts that cannot be spent because they are not in spendable form (e.g., prepaid items, inventories).

Question 2

Under GASB 54, 'Committed' fund balance is established by:

Accepted Answer

Formal action of the government's highest level of decision-making authority

Answer

Committed fund balance requires formal action by the government's highest level of decision-making authority (e.g., legislation or ordinance) to impose and remove the constraint.

Question 3

Capital Projects Funds account for:

Accepted Answer

Financial resources used for the acquisition or construction of major capital facilities

Answer

Capital Projects Funds account for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds.

Question 4

In governmental fund financial statements, which of the following would be reported as an expenditure rather than an expense?

Accepted Answer

Principal payment on long-term debt

Answer

Under modified accrual, governmental funds report principal payments on long-term debt as expenditures when due, since they do not carry long-term liabilities.

Question 5

Which of the following is an example of a fiduciary fund?

Accepted Answer

Pension Trust Fund

Answer

Pension Trust Funds are fiduciary funds that account for resources held in trust for pension plan members and beneficiaries.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Governmental Accounting and Fund Accounting 3