Financial Management & Budgeting Flashcards
7 cards from real CMO 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 Management & Budgeting flashcards as text
A municipality uses a line-item budget but wants to link spending to measurable outcomes. Which budget format best achieves this?
Answer: Performance-based budgeting
Performance-based budgeting ties appropriations to measurable program outcomes rather than simply listing expenditure categories.
Which financial statement reports a government's assets, liabilities, and net position as of a specific date?
Answer: Statement of net position
The statement of net position (balance sheet equivalent) presents assets, deferred outflows, liabilities, deferred inflows, and net position at a point in time.
Under GASB standards, what is the primary criterion for including a component unit in a municipality's financial reporting?
Answer: The municipality is financially accountable for the unit
GASB Statement No. 14 requires inclusion when the primary government is financially accountable for the component unit.
A city council approves $500,000 for road repairs but the public works director spends $520,000. This constitutes a:
Answer: Over-expenditure of appropriation
Spending beyond the legally adopted appropriation is an over-expenditure, which is prohibited without a formal budget amendment.
What does the term 'fund balance' represent in governmental accounting?
Answer: Difference between fund assets/deferred outflows and liabilities/deferred inflows
Fund balance is the residual of fund assets plus deferred outflows of resources minus liabilities and deferred inflows of resources.
Which type of municipal bond is backed solely by the revenue generated from the financed project?
Answer: Revenue bond
Revenue bonds are repaid exclusively from the income produced by the specific project or enterprise they finance, not from general tax revenues.
A municipality wants to set aside funds annually to retire a bond issue at maturity. This fund is called a:
Answer: Sinking fund
A sinking fund accumulates regular contributions to ensure sufficient resources are available to repay bond principal at maturity.