CPWM Budget and Finance 4

Question 1

A public works department's revenue bond is backed by:

Accepted Answer

Specific revenues generated by the funded project or enterprise

Answer

Revenue bonds are repaid solely from the revenues generated by the specific project or enterprise they finance, such as water or sewer fees.

Question 2

When preparing a budget request, a public works manager uses trend analysis to forecast future costs. Which data is LEAST useful for this purpose?

Accepted Answer

The manager's personal opinion on future needs

Answer

Trend analysis relies on objective historical data and benchmarks; personal opinions without data support are the least reliable forecasting input.

Question 3

Under GASB standards, infrastructure assets such as roads and bridges must be reported on the government-wide financial statements at:

Accepted Answer

Historical cost less accumulated depreciation

Answer

GASB standards require capital assets including infrastructure to be reported at historical cost (or estimated cost) net of accumulated depreciation on government-wide statements.

Question 4

A public works department uses an internal service fund. What is the primary purpose of this fund type?

Accepted Answer

To centralize accounting for services provided to other departments within the same government

Answer

Internal service funds account for activities that provide goods or services to other departments or agencies of the same government on a cost-reimbursement basis.

Question 5

A public works director reviews a budget variance report showing a 15% unfavorable variance in fuel costs. What is the FIRST step in responding to this variance?

Accepted Answer

Investigate the cause to determine whether it is a price, volume, or efficiency issue

Answer

Understanding the root cause of a variance—whether driven by price changes, higher usage volume, or inefficiency—is essential before deciding on a corrective action.

(CPWM) Certified Public Works Manager Practice Test

(CPWM) Certified Public Works Manager Practice Test

CPWM Budget and Finance 4