CPRE Finance and Budgeting 2

Question 1

Which cost allocation method assigns indirect costs based on specific activities that drive those costs?

Accepted Answer

Activity-based costing

Answer

Activity-based costing assigns indirect costs to cost objects based on the activities that drive those costs.

Question 2

Depreciation on park infrastructure is recorded primarily to:

Accepted Answer

Match the cost of long-lived assets with the periods they benefit

Answer

Depreciation allocates the cost of a capital asset over its useful life to match expense recognition with the benefit period.

Question 3

A park district issues general obligation bonds. The primary security pledged to bondholders is:

Accepted Answer

The full faith and credit and taxing power of the government

Answer

General obligation bonds are backed by the issuer's pledge of its full faith and credit, including the power to levy taxes.

Question 4

A cost-benefit analysis for a new recreation center should express benefits and costs in:

Accepted Answer

Present value terms

Answer

Cost-benefit analysis converts all future cash flows to present value to allow valid comparison on a common time basis.

Question 5

Which financial document provides a snapshot of an agency's assets, liabilities, and net position at a specific point in time?

Accepted Answer

Statement of net position

Answer

The statement of net position (balance sheet) presents assets, liabilities, and net position as of a specific date.

CPRE - Certified Park and Recreation Executive Practice Test