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
What is the 'modified accrual' basis of accounting used in governmental fund statements?
Answer: Revenue recognized when available and measurable; expenditures when the liability is incurred
Modified accrual recognizes revenues when they are measurable and available (collectible within 60 days of year-end), and expenditures when the fund liability is incurred.
A city's property tax levy is $8M but the council applies a 2% uncollectable allowance. What amount is recognized as estimated revenue?
Answer: $7,840,000
Applying a 2% allowance for uncollectibles to an $8M levy yields $8,000,000 × 0.98 = $7,840,000 in estimated collectible revenue.
Which budget format links appropriations to measurable outcomes and service delivery performance?
Answer: Performance-based budget
Performance-based budgeting ties funding to measurable outputs and outcomes, allowing decision-makers to evaluate cost-effectiveness of programs.
A city's pension fund has $80M in assets and $120M in actuarially determined liabilities. What is the funded ratio?
Answer: 67%
Funded ratio = assets ÷ liabilities = $80M ÷ $120M = 66.7%, rounded to 67%, indicating the plan is underfunded.
What is an 'allotment' in the context of budget execution?
Answer: A division of annual appropriations into smaller time-period spending limits
Allotments divide an annual appropriation into periodic (monthly or quarterly) spending limits to prevent departments from exhausting annual budgets too early.
Which of the following best describes 'tax increment financing' (TIF) as a municipal economic development tool?
Answer: Capturing future property tax growth within a district to repay redevelopment bonds
TIF freezes the tax base in a designated district and dedicates increases in property tax revenue (the increment) to repay bonds issued to fund infrastructure improvements.
Under the Government Finance Officers Association (GFOA) best practices, what is the recommended minimum level of unrestricted general fund balance?
Answer: Two months (approximately 17%) of regular general fund operating revenues
GFOA recommends governments maintain an unrestricted general fund balance of no less than two months of regular general fund operating revenues or expenditures.