CGFO Budgeting Practices 2

Question 1

Which budgeting approach requires every department to justify all expenditures from a zero base each budget cycle?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires departments to justify all expenditures from scratch rather than using the prior year's budget as a baseline.

Question 2

A government's budget is considered 'structurally balanced' when:

Accepted Answer

Recurring revenues are sufficient to cover recurring expenditures

Answer

Structural balance means ongoing recurring revenues cover recurring expenditures, excluding one-time items that can mask a long-term imbalance.

Question 3

Under GASB standards, what is the primary purpose of the budget-to-actual comparison schedule in governmental funds?

Accepted Answer

To demonstrate compliance with legally adopted budgets

Answer

The budget-to-actual comparison schedule demonstrates whether the government complied with its legally adopted appropriations budget.

Question 4

Which technique is BEST used to smooth the impact of large, irregular capital expenditures on annual operating budgets?

Accepted Answer

Capital reserve fund contributions

Answer

Capital reserve funds allow governments to accumulate resources over time so large capital expenditures don't cause dramatic single-year budget spikes.

Question 5

A 'lapse' in government budgeting refers to:

Accepted Answer

The expiration of unspent appropriations at year-end

Answer

A lapse occurs when unspent appropriation authority expires at the close of a fiscal year and is returned to the fund balance.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Budgeting Practices 2