CSET Financial Management & Budgeting 2

Question 1

A school district receives an unexpected state grant mid-year. Which budget process should be used to incorporate these funds?

Accepted Answer

Budget amendment

Answer

A budget amendment is the formal process for modifying an adopted budget to reflect new revenue sources such as unexpected grants.

Question 2

Which financial statement shows a school district'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 equivalent) presents assets, liabilities, and net position as of a specific date.

Question 3

An administrator notices that salary expenditures are 60% spent after only 40% 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 overspending reflects timing differences, errors, or a real budget problem before taking corrective action.

Question 4

In governmental accounting, which fund type is used to account for resources restricted for a specific purpose by external parties?

Accepted Answer

Special revenue fund

Answer

Special revenue funds account for proceeds restricted or committed for specific purposes other than debt service or capital projects.

Question 5

What does the term 'encumbrance' refer to in school district accounting?

Accepted Answer

Funds reserved for outstanding purchase orders

Answer

Encumbrances represent commitments related to unperformed contracts or purchase orders, reserving budget authority before the actual expenditure occurs.

CSET Test Practice Test

CSET Test Practice Test

CSET Financial Management & Budgeting 2