CPRE Finance and Budgeting 1

Question 1

Which budgeting approach requires each department to justify all expenditures from scratch each fiscal year?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires all expenses to be re-justified each period rather than using prior-year figures as a baseline.

Question 2

A park district's capital improvement plan (CIP) typically covers what time horizon?

Accepted Answer

5–10 years

Answer

Capital improvement plans typically span 5–10 years to allow for long-range infrastructure planning and funding allocation.

Question 3

Which financial ratio measures an agency's ability to meet short-term obligations?

Accepted Answer

Current ratio

Answer

The current ratio (current assets divided by current liabilities) indicates whether an agency can cover its short-term debts.

Question 4

Enterprise fund accounting is used in parks and recreation primarily to:

Accepted Answer

Account for activities that are largely self-supporting through user fees

Answer

Enterprise funds are used for government activities that recover costs primarily through charges to users, such as golf courses or aquatic centers.

Question 5

Which standards body governs the financial reporting requirements for local government agencies including park districts?

Accepted Answer

GASB

Answer

The Governmental Accounting Standards Board (GASB) sets accounting and financial reporting standards for state and local governments.

CPRE - Certified Park and Recreation Executive Practice Test