CGFM Governmental Accounting and Fund Accounting 1

Question 1

Which basis of accounting is used by governmental funds under GAAP?

Accepted Answer

Modified accrual basis

Answer

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

Question 2

Under the modified accrual basis, revenues are recognized when they are:

Accepted Answer

Measurable and available

Answer

Modified accrual requires revenues to be measurable and available (collectible within the current period or soon enough to pay current liabilities) for recognition.

Question 3

Which of the following is a proprietary fund type?

Accepted Answer

Enterprise Fund

Answer

Enterprise Funds are proprietary funds used to account for activities financed by user charges, similar to private business operations.

Question 4

The General Fund accounts for:

Accepted Answer

All financial resources not required to be accounted for in another fund

Answer

The General Fund is the chief operating fund and accounts for all financial resources except those required to be accounted for in another fund.

Question 5

Internal Service Funds are classified as which type of fund?

Accepted Answer

Proprietary fund

Answer

Internal Service Funds are proprietary funds used to account for services provided by one department to other departments on a cost-reimbursement basis.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Governmental Accounting and Fund Accounting 1