CGFO - Budget & Capital Planning Mandatory Exam Questions And Correct Answers
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Course
CGFO - Certified Government Finance Officer
Institution
CGFO - Certified Government Finance Officer
Account A separate financial reporting unit for budgeting, management, or accounting
purposes. All budgetary transactions, revenue or expenditure, are recorded in these. Several
related units may be grouped into a fund. A list of these units into which money can be put or
taken is a "chart o...
CGFO - Budget & Capital Planning Mandatory Exam Questions And Correct Answers Account ✔✔✔ A separate financial reporting unit for budgeting, management, or accounting purposes. All budgetary transactions, revenue or expenditure, are recorded in these. Several related units may be g rouped into a fund. A list of these units into which money can be put or taken is a "chart of ____________." Accountability types gained from information in the budget document ✔✔✔ 1. Responding to bureaucratic or hierarchical authority, esp. Compliance w ith state laws 2. Reporting to the public how the money was spent. 3. Holding elected officials accountable for budget outcomes. 4. Direct citizen control or influence over formation of the budget, the allocation process and priorities in the budget. Accrual basis ✔✔✔ When a financial transaction is recorded. This basis is a method of accounting in which revenues are recorded when measurable and earned, and expenses are recognized when a good or service is used. In the Modified basis of this method, expe nditures are recognized when the goods or services are received and revenues, such as taxes, are recognized when measurable and available to pay expenditures in the current accounting period. Activity ✔✔✔ Departmental efforts that contribute toward the ac complishment of specific, identified program objectives. Allotment ✔✔✔ The gradual release of funds to departments or other units within government that prevents premature depletion of their appropriation. Arbitrage ✔✔✔ Transactions by which securities a re bought and sold in different markets at the same time for the sake of profits from a difference in prices in the two markets. In municipal bonds, this usually refers to the difference between the interest paid on the bonds issued and interest earned by investing the bond proceeds in other securities. Arbitrage profits are permitted on bond proceeds for various temporary periods after issuance of municipal bonds. IRS regs govern arbitrage of muni bond proceeds. Available Fund Balance ✔✔✔ Money remaining from prior years that is not committed for other purposes and can be allocated in the upcoming budget. Balanced Budget ✔✔✔ Current revenues equal current expenditures. Legal requirements for a this may be set by state or local government. Basis of Accoun ting ✔✔✔ See Accrual Basis. Benefits Received Principle ✔✔✔ Users or those who benefit from a service pay for at least a portion of the cost of providing that service. Examples are gasoline and motor fuels taxes earmarked for road improvements and water/w astewater service charges based on amount of service used. Budget ✔✔✔ A plan for spending that balances revenues and expenditures over s fixed time period, usually a year, and that includes, at least by implication, a work plan. In practice, the term has two connotations: the financial plan presented to a body for adoption; and the plan finally approved by that body. It is usually necessary to specify whether the this is proposed or approved. Budget Amendment ✔✔✔ The budget may be formally changed after a pproval. These may be required, for example, with the incorporation of a new labor contract or if revenues fall or grow beyond projections. Budget calendar ✔✔✔ A time table with deadlines when particular tasks must be completed in order for Council to app rove the spending plan before the beginning of the next fiscal year. Budget cycle ✔✔✔ This includes preparation of budget requests, legislative approval of the budget requests, budget implementation, and summary reporting on actual budget transactions. Budget examination ✔✔✔ A program evaluation tool that reviews the workload measures agencies compile as part of budget requests. Growth in workloads can be used to gauge the need for additional resources. Budget guidelines ✔✔✔ Once revenue projections are in place, the chief executive, along with key policy makers, develops these to provide a sense of the budget environment for the forthcoming year. Departments can then make appropriate budgetary requests based on this information. Budget manual ✔✔✔ A boo klet prepared by the budget office that provides a description of the budget process and the forms departments need to prepare budget requests; also contains the budget calendar. Also called "The Budget Call" Budget process ✔✔✔ 1. Budget call 2. Agency bu dget request 3. Prepare proposed budget 4. Legislative consideration and adoption 5. Implementation 6. Audit and evaluation. Budget reserves ✔✔✔ Money accumulated for future purposes in the case of unforeseen circumstances or for the replacement of buildi ngs or equipment. Building improvement (reserves) ✔✔✔ Money accumulated for deferred maintenance, renovations, and repairs to government -owned facilities. Caffer Curve ✔✔✔ Asserts that successive increases to a tax rate produce higher levels of revenue t o a point. At the highest point of the curve, revenue is maximized. Increases to tax rates beyond this point have a detrimental effect on economic activity and actually reduce revenue by eroding the tax base. Capital assets ✔✔✔ Things the city owns, such as buildings, land, roads, bridges, and water treatment plants, that cost a considerable amount of money and are intended to last a long time.
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