CGFM MCQ 4

Question 1

Under the Chief Financial Officers (CFO) Act of 1990, which agencies are required to prepare annual audited financial statements?

Accepted Answer

The 24 largest federal agencies designated as CFO Act agencies

Answer

The CFO Act designated 24 major federal agencies that must prepare annual financial statements subject to audit.

Question 2

A city issues general obligation bonds to finance a new public library. Under GASB standards, the debt service payments should be reported in:

Accepted Answer

The Debt Service Fund

Answer

Debt Service Funds account for the accumulation of resources and payment of principal and interest on long-term general obligation debt.

Question 3

The concept of 'interperiod equity' in governmental accounting means:

Accepted Answer

Current-year revenues should be sufficient to pay for current-year services

Answer

Interperiod equity means that current taxpayers pay for the services they receive and do not shift costs to future taxpayers.

Question 4

Under federal accounting standards (FASAB), which of the following is a stewardship asset?

Accepted Answer

Heritage assets such as the National Mall

Answer

Heritage assets (like national monuments, historic sites, and museum collections) are stewardship assets reported in supplementary information rather than on the balance sheet.

Question 5

An auditor discovers that a federal program's internal controls are weak enough that material misstatements could occur undetected. This should be reported as a:

Accepted Answer

Material weakness

Answer

A material weakness is a deficiency or combination of deficiencies in internal control such that there is a reasonable possibility of material misstatement going undetected.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM MCQ 4