CPRP Financial Management and Budgeting 5

Question 1

A park agency is considering issuing General Obligation (GO) bonds for a new aquatic center. What backs GO bonds?

Accepted Answer

The full faith and credit of the issuing government

Answer

General Obligation bonds are backed by the issuing government's taxing power and full faith and credit, not the revenue of a specific project.

Question 2

Which financial statement shows a government's assets, liabilities, and net position at a specific point in time?

Accepted Answer

Balance sheet (statement of net position)

Answer

The balance sheet or statement of net position is a snapshot of financial position — assets minus liabilities — on a given date.

Question 3

A recreation manager notices that actual spending in the 'supplies' line item is 40% over budget at the midpoint of the fiscal year. What is the most appropriate immediate action?

Accepted Answer

Conduct a variance analysis to identify the cause

Answer

Variance analysis identifies whether the overrun stems from increased enrollment, price increases, or poor controls before deciding on corrective action.

Question 4

In the context of parks and recreation finance, what is a 'tiered pricing' strategy?

Accepted Answer

Offering reduced fees for residents versus non-residents and further discounts for low-income participants

Answer

Tiered pricing typically distinguishes resident/non-resident rates and includes income-based scholarships to balance access with cost recovery goals.

Question 5

What does the term 'fund balance' represent in governmental accounting?

Accepted Answer

The difference between fund assets and fund liabilities

Answer

Fund balance is the residual of assets over liabilities within a governmental fund, analogous to equity in the private sector.

CPRP - Certified Park and Recreation Professional Practice Test

CPRP - Certified Park and Recreation Professional Practice Test

CPRP Financial Management and Budgeting 5