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Finance and Budgeting Flashcards

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

Read the first 7 Finance and Budgeting flashcards as text

  1. A park district uses an internal service fund to account for its fleet maintenance operations. Which statement best describes the purpose of this fund type?

    Answer: To provide services to other departments on a cost-reimbursement basis

    Internal service funds account for goods or services provided by one department to other departments within the same government on a cost-reimbursement basis.

  2. When preparing a parks and recreation budget, a manager identifies a variance between the amended budget and actual expenditures. A favorable variance in expenditures means:

    Answer: Actual spending was less than the budgeted amount

    A favorable expenditure variance occurs when actual costs come in below the budgeted amount, leaving unspent appropriations.

  3. A recreation department is evaluating a public-private partnership (P3) for a new aquatic center. The primary financial advantage of a P3 arrangement for the agency is typically:

    Answer: The private partner assumes some or all construction and operational risk

    In a P3, transferring construction and/or operational risk to the private partner is a key financial benefit for the public agency.

  4. Which financial ratio best measures a park agency's short-term ability to meet its current liabilities using only its most liquid assets?

    Answer: Quick ratio

    The quick ratio (cash + receivables divided by current liabilities) excludes less liquid assets like inventory, providing a stricter measure of short-term liquidity.

  5. A parks department receives a $500,000 federal Community Development Block Grant (CDBG) for park improvements in a low-income neighborhood. How should this revenue be classified in the budget?

    Answer: Intergovernmental revenue restricted to the designated purpose

    CDBG funds are intergovernmental revenues from the federal government and carry restrictions on how and where they must be spent.

  6. A CPRE candidate is reviewing a parks agency's Statement of Net Position. Which item would be classified as a deferred outflow of resources?

    Answer: Pension contributions made after the measurement date

    Under GASB standards, employer pension contributions made after the measurement date are reported as deferred outflows of resources on the Statement of Net Position.

  7. A recreation department wants to apply cost-benefit analysis (CBA) to a proposed spray park. A key challenge specific to CBA in public parks contexts is:

    Answer: Quantifying the monetary value of social and health benefits

    CBA in public recreation is challenging because social benefits (community health, quality of life, equity) are difficult to express in dollar terms.