GAC Client Advisory Services 4

Question 1

An advisor helping a government client analyze its capital improvement program (CIP) should ensure the plan is directly linked to which document?

Accepted Answer

The government's strategic plan and long-range financial plan

Answer

A CIP should be tied directly to the government's strategic plan and long-range financial plan to ensure capital investments align with community goals and fiscal capacity.

Question 2

Under GASB Statement No. 87, a government lessee must recognize a lease liability and which corresponding asset?

Accepted Answer

A right-to-use lease asset

Answer

GASB 87 requires lessees to recognize both a lease liability and a right-to-use (intangible) lease asset on the statement of net position.

Question 3

A government advisor identifies that a department has significant unspent appropriations at year-end every year. The best advisory recommendation is to:

Accepted Answer

Conduct a budget realignment to redirect unused appropriations to higher-need areas

Answer

Budget realignment redirects unspent appropriations to departments or programs with genuine needs, improving overall resource allocation efficiency.

Question 4

When advising on grant management, which federal guidance governs cost principles, audit requirements, and administrative requirements for federal awards?

Accepted Answer

2 CFR Part 200 (Uniform Guidance)

Answer

2 CFR Part 200 (Uniform Guidance) consolidates federal grant management rules including cost principles, audit requirements, and administrative standards.

Question 5

A government client is considering issuing general obligation bonds. Which factor most directly affects the interest rate the government will pay on those bonds?

Accepted Answer

The government's credit rating from a nationally recognized rating agency

Answer

Credit ratings from agencies like Moody's, S&P, or Fitch directly influence investor confidence and therefore the interest rate a government pays on its bonds.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Client Advisory Services 4