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CMFO EXAM STUDY GUIDE
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CMFO EXAM STUDY GUIDE
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CMFO EXAM STUDY GUIDEAccounts Receivable - A/R - Answers- Amounts owed to you by other parties, such as
taxpayers, other agencies & financial institutions and shown on its balance sheet as an
asset
Chart of Accounts - Answers- The standard system of account titles kept for accounting
records
- Flexible Chart of Accounts (FCOA)
-Use to organize and segregate expenditures, revenues, assets, and liabilities
Accounting Equation - Answers- Asset = Liabilities (reserve) + Fund Balance (surplus)
Dr = Cr + Cr
- Balance Sheet based on accounting equation
- Balance Sheet presents asset on the left-hand side
Steps In a Transaction (Accounting Entries) - Answers- 1. Business Transaction
(Source Document)
2. Journal Entry
3. General Ledger
4. Trial Balance
5. Finance Statements (Balance Sheet, Income Sheet)
Accounts Payable, A/P - Answers- The bills your municipalities owes to vendors and
other agencies such as the school district, county, and special district, shown on the
organization's balance sheet as a liability
Accrual Method - Answers- A system that records the sales (any types), regardless
when payment is made.
- Expenditure is recorded when goods or services are received, though the payment
may be deferred
Planning - Answers- This component involves defining goals and deciding how these
goals can best be achieved
Programming - Answers- This component plans for how resources will be used to
achieve the objectives that support the mission
Budgeting - Answers- The activities that encompass the development, implementation,
and evaluation of a plan for the provision of services and capital assets
Operations - Answers- Consists of the activities required to achieve objectives
Accounting - Answers- The recording and reporting of financial transactions
, Reporting - Answers- Provides citizens information about the city's stewardship of
resources and current financial status
Auditing - Answers- May involve an independent CPA following GAGAS
What are the three elements of an investment policy applicable to every municipality? -
Answers- 1. Primary Objectives
- Safety, Liquidity, Yield
2. Prudence
3. Ethics and Conflicts of Interest
This US invention divides & shares power between a national level & one or more sub-
national units of government: - Answers- Federal
Constitutionally, which branch of government is responsible for Implementing law &
policy? - Answers- Executive
What provides the legal basis for expenditures in Tennessee? - Answers- Budgets
Any new municipal government must be formed under ..... - Answers- General law
charters
The city's mayor prepares the budget and hires and fires employees under this charter. -
Answers- Mayor-aldermanic
When a private act charter municipality wants to amend its charter..... - Answers- The
state legislature must amend it
What elements are inherent responsibilities of a municipal finance officer? - Answers-
Duty of care and Duty of loyalty
Municipal property taxes are levied by the...... - Answers- Municipal governing board.
What is the most common type of operating budget? - Answers- Line item
Annual appropriations are synonymous with which of the following? - Answers- Budget
ordinance.
Although a capital budget is not required the next year's capital outlay must be
included..... - Answers- In the operating budget.
Balance Sheet - Answers- -Financial "Snapshot" of the organization at a given date in
time
-It lists assets, liabilities, and fund balance
-Real life example of accounting equation
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