CGFO Revenue Administration 2

Question 1

Which method of revenue recognition is required for governmental funds under GASB standards?

Accepted Answer

Modified accrual basis when measurable and available

Answer

Governmental funds use modified accrual, recognizing revenue when it is measurable and available to finance current-period expenditures.

Question 2

A local government imposes a special assessment on property owners to fund a sidewalk construction project. This revenue is best classified as:

Accepted Answer

Special assessment revenue

Answer

Special assessments are levies on benefiting property owners for specific capital improvements and are reported separately from general taxes.

Question 3

Under GASB Statement No. 33, which condition must be met before a government recognizes grant revenue using the expenditure-driven model?

Accepted Answer

Eligible expenditures must be incurred

Answer

Expenditure-driven (reimbursement) grants require the recipient to incur qualifying expenditures before the revenue eligibility condition is met.

Question 4

A government collects $500,000 in property taxes but expects 3% to be uncollectible. How should the uncollectible amount be reported?

Accepted Answer

As a reduction of revenue via an allowance for uncollectible taxes

Answer

Governments establish an allowance for uncollectible taxes, which reduces gross tax revenue to reflect the net realizable amount.

Question 5

Which type of government revenue is most directly tied to the ability-to-pay principle?

Accepted Answer

Progressive income tax

Answer

Progressive income taxes impose higher rates on higher earners, directly applying the ability-to-pay principle to government revenue.

(CGFO) Certified Government Finance Officer Practice Test