CGFM Government Financial Management and Cash Management

Question 1

Which federal law requires agencies to collect receivables promptly and deposit collections into the Treasury as quickly as possible?

Accepted Answer

The Cash Management Improvement Act of 1990

Answer

The Cash Management Improvement Act of 1990 requires states and the federal government to minimize the time between receiving federal funds and disbursing them for program purposes.

Question 2

What is the primary purpose of the Prompt Payment Act in federal government?

Accepted Answer

Requiring federal agencies to pay vendors by specified due dates or pay interest penalties

Answer

The Prompt Payment Act requires federal agencies to pay vendors by the due date (generally 30 days after receipt of a proper invoice) or pay interest penalties.

Question 3

What is 'cash management' in government financial management?

Accepted Answer

Optimizing the timing of cash inflows and outflows to minimize borrowing costs and maximize investment income

Answer

Government cash management involves optimizing collection, disbursement, and investment of funds to minimize idle cash, reduce borrowing needs, and maximize returns.

Question 4

Which U.S. Treasury system serves as the federal government's central accounting system for recording receipts and disbursements?

Accepted Answer

CARS (Central Accounting Reporting System)

Answer

CARS (Central Accounting Reporting System) is Treasury's system that serves as the official source for government-wide account balances and financial data.

Question 5

What is an 'Intra-governmental transaction' in federal financial management?

Accepted Answer

A financial transaction between two federal agencies where one acts as buyer and the other as seller

Answer

Intra-governmental transactions are financial transactions between two federal entities, such as when one agency provides goods or services to another agency.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Government Financial Management and Cash Management