GAC Governmental Financial Reporting & Analysis 2

Question 1

Which financial statement in a government's CAFR presents revenues, expenditures, and changes in fund balances for governmental funds?

Accepted Answer

Statement of Revenues, Expenditures, and Changes in Fund Balances

Answer

The Statement of Revenues, Expenditures, and Changes in Fund Balances is the operating statement for governmental funds, using the modified accrual basis.

Question 2

Under GASB standards, which basis of accounting is used for proprietary funds?

Accepted Answer

Full accrual basis

Answer

Proprietary funds use the full accrual basis of accounting, recognizing revenues when earned and expenses when incurred.

Question 3

A city's General Fund reports an unreserved fund balance of $5M and a reserved fund balance of $2M. What is the total fund balance?

Accepted Answer

$7 million

Answer

Total fund balance equals unreserved ($5M) plus reserved ($2M) fund balances, totaling $7 million.

Question 4

Which component of the CAFR provides narrative overview and analysis of the government's financial activities for the year?

Accepted Answer

Management's Discussion and Analysis (MD&A)

Answer

MD&A is required supplementary information that provides an objective analysis of the government's financial activities and position.

Question 5

Under GASB 54, which fund balance classification represents amounts that are constrained to specific purposes by external parties or constitutional provisions?

Accepted Answer

Restricted

Answer

Restricted fund balance is constrained by externally imposed requirements from creditors, grantors, contributors, or laws and regulations.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Governmental Financial Reporting & Analysis 2