Financial Management & Budgeting Flashcards

Under GASB standards, what basis of accounting do governmental funds use?

Answer: Modified accrual basis

Governmental funds use the modified accrual basis, recognizing revenues when measurable and available, and expenditures when the liability is incurred.

Which of the following best describes 'categorical funding' in K-12 education finance?

Answer: Funding designated for a specific program or population

Categorical funding is restricted to specific programs or student populations, such as special education or English learner services.

A district is considering issuing general obligation bonds to fund a new school building. Who must typically authorize this borrowing?

Answer: Voters in the district

General obligation bonds backed by property taxes typically require voter approval in a bond election.

What is the primary purpose of an internal audit function in a school district?

Answer: Independently evaluating internal controls and compliance

Internal auditing independently evaluates the adequacy and effectiveness of a district's internal controls, risk management, and governance processes.

Which expenditure classification identifies costs by the nature of goods or services purchased, such as salaries, benefits, or supplies?

Answer: Object classification

Object classification categorizes expenditures by the type of item or service purchased, such as personnel services, supplies, or capital outlay.

A school district's fund balance is classified as 'restricted.' What does this indicate?

Answer: External constraints limit how the funds can be used

Restricted fund balance results from externally imposed constraints—such as constitutional provisions, enabling legislation, or bond covenants—that limit resource use.

Which of the following is an example of a capital expenditure in a school district budget?

Answer: Constructing a new gymnasium valued at $2 million

Capital expenditures involve acquiring or constructing long-lived assets such as buildings, with the gymnasium representing a major capital project.