CMC Financial Administration & Budgets 5

Question 1

What is the 'modified accrual' basis of accounting used in governmental fund statements?

Accepted Answer

Revenue recognized when available and measurable; expenditures when the liability is incurred

Answer

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.

Question 2

A city's property tax levy is $8M but the council applies a 2% uncollectable allowance. What amount is recognized as estimated revenue?

Accepted Answer

$7,840,000

Answer

Applying a 2% allowance for uncollectibles to an $8M levy yields $8,000,000 × 0.98 = $7,840,000 in estimated collectible revenue.

Question 3

Which budget format links appropriations to measurable outcomes and service delivery performance?

Accepted Answer

Performance-based budget

Answer

Performance-based budgeting ties funding to measurable outputs and outcomes, allowing decision-makers to evaluate cost-effectiveness of programs.

Question 4

A city's pension fund has $80M in assets and $120M in actuarially determined liabilities. What is the funded ratio?

Accepted Answer

67%

Answer

Funded ratio = assets ÷ liabilities = $80M ÷ $120M = 66.7%, rounded to 67%, indicating the plan is underfunded.

Question 5

What is an 'allotment' in the context of budget execution?

Accepted Answer

A division of annual appropriations into smaller time-period spending limits

Answer

Allotments divide an annual appropriation into periodic (monthly or quarterly) spending limits to prevent departments from exhausting annual budgets too early.

(CMC) Certified Municipal Clerk Practice Test

(CMC) Certified Municipal Clerk Practice Test

CMC Financial Administration & Budgets 5