Practice Test Geeks(CMC) Certified Municipal Clerk Practice Test
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Financial Administration & Budgets Flashcards

7 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Administration & Budgets flashcards as text

  1. A municipal clerk is asked to certify that an expenditure does not exceed available appropriations before a purchase order is signed. This process is called:

    Answer: Pre-audit

    A pre-audit checks that sufficient appropriated funds exist before a commitment is made, ensuring expenditures stay within legal limits.

  2. Which GASB statement established the current framework for fund financial statements and government-wide financial statements?

    Answer: GASB 34

    GASB Statement No. 34 (1999) created the dual reporting model requiring both government-wide and fund-level financial statements.

  3. When a city transfers money from the general fund to a debt service fund to pay bond principal and interest, this is recorded as a:

    Answer: Operating transfer out

    Interfund transfers are recorded as 'transfers out' in the originating fund and 'transfers in' in the receiving fund, not as revenues or expenditures.

  4. Which type of municipal revenue is considered 'own-source' revenue, providing the most budget flexibility?

    Answer: Local property taxes

    Local property taxes are own-source revenues fully controlled by the municipality, unlike grants or shared revenues that carry donor restrictions.

  5. A city adopts a budget in June for the fiscal year beginning July 1. The budget becomes effective on July 1. What is the period between budget adoption and fiscal year start called?

    Answer: Budget transition period

    The period between budget adoption and the start of the new fiscal year is commonly called the budget transition period, during which the budget is finalized for implementation.

  6. What distinguishes a 'capital' expenditure from an 'operating' expenditure in municipal budgeting?

    Answer: Capital expenditures acquire long-lived assets; operating covers day-to-day costs

    Capital expenditures purchase or improve assets with multi-year useful lives (buildings, equipment), while operating expenditures fund ongoing services and supplies.

  7. A municipality's actuals come in $300,000 under appropriation at year-end. Under most governmental accounting rules, what happens to that unspent balance?

    Answer: It lapses back to the general fund balance

    Unspent appropriations generally lapse at fiscal year-end and revert to the fund balance, unless a formal carryover or encumbrance reservation was made.