Free CGFM Questions and Answers

Question 1

Every employee should have a personnel file that contains documentation for their hiring, a history of their pay, the number of hours they are authorized to work, federal and state withholding forms, information about their health insurance and retirement benefits, and documentation for any other payout deductions. There are the following steps:

Accepted Answer

Both Cash Disbarments in payroll department and Separation of duties in a small of government

Answer

The scenario highlights the importance of strong internal controls in payroll. 'Cash Disbursements in payroll department' refers to the controls over the actual payout process, ensuring accuracy and preventing fraud. 'Separation of duties in a small government' is crucial to prevent a single individual from having too much control over a process, even in smaller entities, thus safeguarding assets and maintaining accountability.

Question 2

The accounting for managing investment inventory, disbursing cash, managing cash, and billing and receiving taxes and utilities should all be subject to the same accounting controls. Which of the following other internal control measures is effective?

Accepted Answer

All of there

Answer

Effective internal control measures for managing financial assets and transactions include all the listed options. Cancelling voided forms prevents their fraudulent reuse, and accounting for used or missing forms daily ensures all transactions are tracked and reconciled. Trusting employees too much, without proper oversight, is a risk, not a control, making the other options vital for safeguarding assets and maintaining accurate financial records.

Question 3

For members of government boards, the following financial decisions are the most politically delicate:

Accepted Answer

Tax and user free rates

Answer

For government boards, decisions regarding 'Tax and user fee rates' are often the most politically sensitive. These decisions directly impact citizens and businesses, affecting their disposable income and the cost of public services, leading to significant public scrutiny and potential political backlash. While strategic plans and reserve levels are important, they typically do not have the same immediate and widespread public impact.

Question 4

For $91,000, a city purchases a T-bill with a face value of $10,000. The note becomes due in 91 days. How much was produced?

Accepted Answer

8.07%

Answer

The question asks for the annualized yield of a T-bill. Assuming the $91,000 is the purchase price and the T-bill matures in 91 days, the yield is calculated based on the interest earned over this period, annualized to a 365-day year. While the 'face value of $10,000' is likely a typo given the purchase price, an 8.07% yield implies the investment generated an equivalent of 8.07% interest over a full year.

Question 5

What is a stable economy defined as?

I. An equilibrium in the international balance of payments
II. Full employment
III. Economist growth
IV. Frequent changes in Price

Accepted Answer

All except IV

Answer

A stable economy is characterized by an equilibrium in the international balance of payments, indicating stable trade and financial flows, along with full employment, meaning most people who want to work can find jobs. It also includes economic growth, signifying an expanding economy. Frequent changes in price (inflation or deflation) are indicators of economic instability, not stability, making 'All except IV' the correct choice.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

Free CGFM Questions and Answers