MPA Public Budgeting and Finance 2

Question 1

What is a 'fund' in governmental accounting?

Accepted Answer

A self-balancing set of accounts used to record revenues and expenditures for a specific purpose

Answer

In governmental accounting, a fund is a self-balancing set of accounts that segregates resources for particular purposes, such as the General Fund or a Special Revenue Fund.

Question 2

Which statement best describes 'encumbrance accounting'?

Accepted Answer

Reserving funds when a purchase order is issued before the expenditure is actually made

Answer

Encumbrance accounting reserves budget authority at the time a commitment (like a purchase order) is made, preventing over-expenditure of appropriations.

Question 3

The Governmental Accounting Standards Board (GASB) primarily sets standards for:

Accepted Answer

State and local government financial reporting

Answer

GASB establishes generally accepted accounting principles (GAAP) for state and local governments in the United States.

Question 4

What does the 'debt service ratio' measure in public finance?

Accepted Answer

The proportion of government revenue consumed by principal and interest payments on debt

Answer

The debt service ratio measures what share of a government's revenues must go toward repaying debt obligations, indicating fiscal stress when it is high.

Question 5

Which federal agency is responsible for auditing and evaluating federal programs for Congress?

Accepted Answer

Government Accountability Office (GAO)

Answer

The GAO, often called the 'congressional watchdog,' audits federal programs and spending and reports findings to Congress.

MPA - Master of Public Administration Practice Test

MPA - Master of Public Administration Practice Test

MPA Public Budgeting and Finance 2