CGFO Revenue Administration 5

Question 1

A government's property tax levy is $10 million, but the tax roll shows $500 million in assessed value. The effective tax rate is:

Accepted Answer

2%

Answer

The tax rate = levy ÷ assessed value = $10M ÷ $500M = 0.02 = 2%, expressing the levy per dollar of assessed value.

Question 2

Which revenue administration practice most directly reduces the risk of delinquent tax collections?

Accepted Answer

Implementing timely billing, penalty accrual, and lien processes

Answer

Prompt billing cycles, automatic penalty accruals, and tax lien placement create strong incentives for timely payment and enforce collection legally.

Question 3

A city levies a tax increment financing (TIF) district. The incremental property tax revenue generated above the base year assessment is pledged to:

Accepted Answer

Finance infrastructure improvements within the TIF district

Answer

TIF districts capture the property tax growth above a frozen base assessment and use those incremental revenues to fund development within the designated area.

Question 4

Under GASB No. 34, which financial statement presents property tax revenue for governmental activities at the government-wide level?

Accepted Answer

Statement of activities

Answer

The statement of activities reports revenues and expenses of governmental activities using full accrual at the government-wide level.

Question 5

A government finance officer is conducting a revenue diversification analysis. Which outcome best indicates a well-diversified revenue portfolio?

Accepted Answer

Multiple revenue sources with no single source exceeding 30% of total revenue

Answer

Revenue diversification minimizes fiscal vulnerability; best practice guidelines generally suggest no single revenue source should dominate the portfolio.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Revenue Administration 5