Question 1

The schedule of legally required events in the budgeting process is generally referred to as the
A) Budget docket.
B) Legal timetable.
C) Hearing schedule.
D) Budget calendar.

Accepted Answer

The term used to refer to the schedule of legally required events in the budgeting process is the budget calendar. This calendar typically includes important deadlines and milestones, such as the date by which the budget must be submitted to the governing body for approval and the date of any required public hearings. Therefore, choice D, Budget calendar, is the best answer.

Question 2

State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with
A) Cost Accounting Standards Board standards.
B) Office of Management and Budget cost circulars.
C) Financial Accounting Standards Board standards.
D) Governmental Accounting Standards Board standards.

Accepted Answer

The Office of Management and Budget (OMB) cost circulars establish the principles and standards for determining costs applicable to grants, contracts, and other agreements with the federal government. These circulars provide guidance on the allowability, allocability, and reasonableness of costs, and they outline specific cost accounting and reporting requirements. Therefore, choice B is the most appropriate option. While other standards, such as those issued by the Cost Accounting Standards Board (CASB) or the Governmental Accounting Standards Board (GASB), may be applicable in certain circumstances, they are not specific to federal grants and contracts and may not be as relevant in this context. Similarly, the Financial Accounting Standards Board (FASB) standards are generally intended for the private sector and do not govern cost accounting practices for government grants and contracts.

Question 3

Cash disbursements budgets
A) Need to be prepared because GASB standards specify the use of the accrual basis of accounting for governments.
B) Should usually be prepared for each month of the year,or for shorter intervals,in order to facilitate planning short-term borrowings and investments.
C) Should be prepared only for funds not required to operate under legal appropriation budgets.
D) Should be prepared only for each fiscal year because disbursements for each month are approximately equal.

Accepted Answer

Cash disbursements budgets should be prepared for each month of the year or for shorter intervals, in order to facilitate planning short-term borrowings and investments. This allows for better management of cash flow and helps to ensure that there is enough money available to cover expenses as they occur. It is important to have accurate and up-to-date cash disbursements budgets in order to make informed financial decisions and to avoid running into cash flow problems.

Question 4

In budgeting revenues,state and local government administrators should
A) Be careful not to utilize unauthorized sources or exceed authorized ceilings on revenues from specific sources.
B) Ensure that at least the amount of revenues needed to meet spending needs are raised,even if authorized ceilings on some revenue sources must be exceeded.
C) Utilize all authorized revenues sources and at the maximum amount allowed by law.
D) Ignore "other financing sources" since these resource inflows are not available for appropriation.

Accepted Answer

State and local government administrators should be careful not to utilize unauthorized sources or exceed authorized ceilings on revenues from specific sources. This ensures that the budgeting process is legal and transparent. Utilizing unauthorized sources can lead to legal repercussions and damage to the government's reputation. It is also important to follow authorized ceilings on revenues from specific sources because it ensures that the government is not overburdening taxpayers or relying too heavily on a single revenue source.

Question 5

Which of the following statements regarding government budgets is not true?
A) A budget should be enacted before the fiscal year begins and be integrated with the financial accounting system so that actual results can be compared to budgeted plans at regular intervals.
B) The budget's role is limited to inclusion in internal financial reports and budgetary compliance monitoring for those funds that have a legally approved budget.
C) Integrating the budget into the accounting system allows management to oversee individual unit performance and react quickly to variances between actual results and budgeted plans.
D) A budget is a plan of financial operation embodying an estimate of proposed expenditures for a given period of time and the proposed means of financing them.

Accepted Answer

The statement that the budget's role is limited to inclusion in internal financial reports and budgetary compliance monitoring for those funds that have a legally approved budget is not true. The budget also serves as a plan for achieving the organization's goals and objectives, guides decision making, and communicates financial priorities to stakeholders.

Question 6

Which of the following statements is not true?
A) A balanced scorecard is an integrated set of performance targets,both financial and nonfinancial,that are derived from an organization's strategies about how to achieve its goals.
B) Total quality management (TQM)seeks to continuously improve the government's ability to meet or exceed demands from customers who might be external,such as taxpayers and service recipients,or internal,such as the customers of an internal service fund.
C) Service efforts and accomplishments (SEA)reporting links customer (taxpayer and other resource provider)satisfaction to improvements in the operating systems and processes used to provide goods and services.
D) Customer relationship management (CRM)systems create an integrated view of a customer to coordinate services from all channels of the organization with the intent to improve the long-term relationship the organization has with its customer.

Accepted Answer

Service efforts and accomplishments (SEA) reporting does not specifically link customer satisfaction to improvements in operating systems and processes; it focuses on measuring the efficiency and effectiveness of services provided.

Question 7

GASB Concepts Statement No.2 requires state and local governments to include service efforts and accomplishments measures within the comprehensive annual financial report.

Accepted Answer

GASB Concepts Statement No. 2 clarifies the role of SEA reporting as complementary to CAFR reporting yet integral to broader general purpose external financial reporting.

Question 8

The number of lane-miles of road repaired to a specified minimum condition is an example of an
A) Output measure.
B) Input measure.
C) Outcome measure.
D) Efficiency measure.

Accepted Answer

The number of lane-miles of road repaired to a specified minimum condition is an example of an output measure because it represents the tangible results of a specific activity, in this case, repairing road infrastructure. It does not directly measure inputs or outcomes, such as the amount of money invested in repairs or the impact on travel times or safety.

Question 9

Cash receipts and cash disbursement budgets for a government
A) Should be prepared for all funds for the entire fiscal year.
B) Should be prepared as needed to enhance cash management,investment management,and short-term debt management.
C) Should be prepared for only those funds for which appropriations budgets are required by law to be prepared on the accrual basis or the modified accrual basis.
D) Should be prepared for only those funds for which appropriations budgets are not required by law.

Accepted Answer

Cash receipts and cash disbursement budgets for a government should be prepared as needed to enhance cash management, investment management, and short-term debt management. This allows for flexibility in adjusting the budget to account for changes in revenue and expenses throughout the fiscal year. It is not necessary to prepare budgets for all funds for the entire fiscal year, nor is it required only for funds with appropriations budgets prepared on a particular basis.

Question 10

Which of the following budgetary approaches starts with line-item expenditures and applies a factor approximating the inflation rate to most items,unless specific information is available to suggest a different factor be applied?
A) Performance budgeting.
B) Zero-based budgeting.
C) Program budgeting.
D) Incremental budgeting.

Accepted Answer

Incremental budgeting starts with the previous year's budget and makes adjustments based on a factor approximating inflation, unless there is specific information to suggest otherwise. This approach is also known as the "baseline budgeting" approach.

Question 11

Which of the following statements is not consistent with the GASB's "Budgeting,Budgetary Control,and Budgetary Reporting Principle?"
A) An annual budget must be adopted using generally accepted accounting principles.
B) The accounting system should provide the basis for appropriate budgetary control.
C) Budgetary comparison schedules should be presented as required supplementary information for the General Fund and each major special revenue fund for which an annual budget has been adopted.
D) The budgetary comparison schedule should present both the original and the final appropriated budgets for the reporting period.

Accepted Answer

The GASB's "Budgeting, Budgetary Control, and Budgetary Reporting Principle" does not require an annual budget to be adopted using generally accepted accounting principles. However, it does require the budget to be adopted in accordance with legal and regulatory requirements and budgetary policies.

Question 12

Which of the following costs would be allowable under OMB Circular A-87?
A) Advertising on the Internet by a defense contractor.
B) Lobbying for continuation of an educational program by the school administrator.
C) Indirect costs of the state legislature.
D) Depreciation expense on the equipment used in a federal research grant.

Accepted Answer

OMB Circular A-87 allows for the depreciation expense on equipment used in a federal research grant. Option A is not allowable as advertising costs are generally unallowable. Option B is not allowed as lobbying and political activity costs are unallowable. Option C is not allowed as legislative lobbying costs are unallowable.

Question 13

Service efforts and accomplishments (SEA)reporting helps citizens,elected officials,appointed officials,investors and creditors,and other interested parties evaluate the government's performance in the absence of a "bottom line" measure such as exists for for-profit entities.

Accepted Answer

SEA reporting, although not required to be in conformity with GAAP, will provide useful information to decision makers that is not readily available from the general purpose external financial statements or comprehensive annual financial report.

Question 14

Which of the following might appropriately be termed an outcome indicator for a police department that reports service efforts and accomplishments (SEA)indicators?
A) Number of crimes investigated.
B) Value of property lost due to crime.
C) Hours of patrol.
D) Number of personnel hours expended.

Accepted Answer

The answer of Which of the following might appropriately be...

Question 15

Which of the following is not a typical step in the budgeting process for a state or local government?
A) Request by management for input on the budget.
B) Review and revisions of the budget by the administrative staff of each unit.
C) Public hearings for citizen input.
D) Approval by a majority vote of the citizenry.

Accepted Answer

While public hearings for citizen input and review and revisions of the budget by the administrative staff of each unit are typical steps in the budgeting process for a state or local government, approval by a majority vote of the citizenry is not a typical step. Budgets are typically approved by governing bodies, such as city councils or state legislatures.

Question 16

The government official typically responsible for providing department heads with such technical support as clerical assistance with budget computation and maintenance of document files relating to the budget is
A) The chief financial officer.
B) The legislative budget analyst.
C) The budget officer.
D) The director of finance.

Accepted Answer

The position responsible for providing department heads with technical support for budget computation and maintenance of document files relating to the budget is the budget officer. The chief financial officer and director of finance typically have higher level responsibilities in financial management, and the legislative budget analyst may work for a separate branch of government that does not directly provide support to department heads.

Question 17

Effective capital budgeting for general capital assets of a government requires
A) Intermediate and long-range capital improvement plans for general capital assets.
B) Nonfinancial information on physical measures and service condition of capital assets of component units.
C) Consideration of how proprietary fund capital projects will be financed.
D) Information about the capital asset needs of a motor pool accounted for as an internal service fund.

Accepted Answer

Effective capital budgeting for general capital assets of a government necessitates intermediate and long-range capital improvement plans for general capital assets to ensure that investments are made strategically and align with the government's long-term goals and financial capabilities.

Question 18

The GASB "Budgeting Principle" states that an annual budget should be adopted by (for)every
A) Governmental fund type.
B) Fund of a government.
C) Government.
D) Governmental fund type except capital projects funds.

Accepted Answer

The GASB "Budgeting Principle" states that an annual budget should be adopted by the government. This means that the budget should cover all the funds and activities of the government, not just specific fund types or funds. Therefore, choice C is the best answer.

Question 19

An often used approach to budgeting that simply derives the subsequent year's budget from the current year's budget is called:
A) Planning-programming-budgeting.
B) Incremental budgeting.
C) Zero-based budgeting.
D) Performance budgeting.

Accepted Answer

The approach described of deriving the subsequent year's budget from the current year's budget is known as incremental budgeting. It is also sometimes called "baseline budgeting." This method is based on making adjustments to the previous year's budget to accommodate changes such as inflation, salary increases, and other factors that affect budgeting. The advantage of this approach is that it is straightforward and relatively easy to implement, but the disadvantage is that it can lead to a lack of innovation and exploration of more efficient and effective methods of spending.

Question 20

Service efforts and accomplishments (SEA)information
A) Includes indicators of a government's actual performance in providing services to its citizens.
B) Aids users in assessing the economy,efficiency,and effectiveness of government.
C) Is required for all governments that issue a CAFR.
D) Both A and B are true.

Accepted Answer

SEA information includes indicators of a government's actual performance in providing services to its citizens and aids users in assessing the economy, efficiency, and effectiveness of government. It is also required for all governments that issue a CAFR.

Quiz 12: Budgeting and Performance Measurement

The schedule of legally required events in the budgeting process is generally referred to as the

State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with

Cash disbursements budgets

In budgeting revenues,state and local government administrators should

Which of the following statements regarding government budgets is not true?

Which of the following statements is not true?

GASB Concepts Statement No.2 requires state and local governments to include service efforts and accomplishments measures within the comprehensive annual financial report.

The number of lane-miles of road repaired to a specified minimum condition is an example of an

Cash receipts and cash disbursement budgets for a government

Which of the following budgetary approaches starts with line-item expenditures and applies a factor approximating the inflation rate to most items,unless specific information is available to suggest a different factor be applied?

Which of the following statements is not consistent with the GASB's "Budgeting,Budgetary Control,and Budgetary Reporting Principle?"

Which of the following costs would be allowable under OMB Circular A-87?

Service efforts and accomplishments (SEA)reporting helps citizens,elected officials,appointed officials,investors and creditors,and other interested parties evaluate the government's performance in the absence of a "bottom line" measure such as exists for for-profit entities.

Which of the following might appropriately be termed an outcome indicator for a police department that reports service efforts and accomplishments (SEA) indicators?

Which of the following is not a typical step in the budgeting process for a state or local government?

The government official typically responsible for providing department heads with such technical support as clerical assistance with budget computation and maintenance of document files relating to the budget is

Effective capital budgeting for general capital assets of a government requires

The GASB "Budgeting Principle" states that an annual budget should be adopted by (for) every

An often used approach to budgeting that simply derives the subsequent year's budget from the current year's budget is called:

Service efforts and accomplishments (SEA) information