Question 1

Effective capital budgeting for general capital assets of a government requires

Accepted Answer

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.

Question 2

Some of the budgeting approaches governments have experimented with as alternatives to line-item,incremental budgeting include performance budgeting,program budgeting,the planning-programming-budgeting system,and zero-based budgeting.

Accepted Answer

A) True 
 B)False

Question 3

In the chapters that discuss governmental fund-types,it is assumed that budgets are prepared on the modified accrual basis.Examples in those chapters also assume that the perspective of the budget is the fund,and that revenue budgets are prepared by source and appropriations budgets are prepared by function.From the standpoint of financial management of a government,state what objectives are served by preparation of budgets on the same basis as financial statements.

Accepted Answer

The answer of In the chapters that discuss governmental fund-types,it...

Question 4

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

Accepted Answer

A) Governmental fund type. 
B) Fund of a government. 
C) Government. 
D) Governmental fund type except capital projects funds.

Question 5

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

Accepted Answer

A) Budget docket. 
B) Legal timetable. 
C) Hearing schedule. 
D) Budget calendar.

Question 6

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

Accepted Answer

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.

Question 7

Effective financial management requires information about capital assets,including nonfinancial information such as physical measures of capital assets,their service condition,and estimated replacement schedule.

Accepted Answer

A) True 
 B)False

Question 8

In budgeting for the inflow of financial resources,government officials must concern themselves with revenues and other financing sources.

Accepted Answer

A) True 
 B)False

Question 9

Traditional governmental accounting is better suited to determination of costs than to determination of benefits.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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.

Question 11

Name at least three criteria that must be met for costs to be allowable under OMB circulars.

Accepted Answer

The answer of Name at least three criteria that must...

Question 12

Mountain City government has a payroll department that handles the processing of payroll for all city employees.The responsibilities of the payroll department relate to full-time,part-time and contractual employees and include: obtaining information from new employees so they can be added to the payroll; having new employees complete payroll withholding and deduction forms; collecting time sheets; calculating gross pay,appropriate deductions and employer contributions for each pay period; and completing vouchers for contributions and withholdings.The annual budget of the payroll department is  The city charges the payroll department an indirect overhead cost rate based on the number of square feet of office space utilized.The overhead rate is currently $9 per square foot.The overhead rate is intended to cover maintenance costs,utilities,and equipment depreciation.Recently,Mountain City has begun to wonder if it would be more economical to contract for its payroll services.The city's budget administrator contacted a neighboring city and learned that the neighboring city was paying $1.50/check for its payroll function.
Required
1.Calculate Mountain City payroll department's cost per check.
2.Based on costs would it be cheaper to maintain the payroll department or contract out for the payroll services?
3.Discuss what other information you would want before making a decision about retaining or contracting payroll.

Accepted Answer

The answer of Mountain City government has a payroll department...

Question 13

The sole purpose of preparing a governmental budget is to show compliance with laws and regulations.

Accepted Answer

A) True 
 B)False

Question 14

If governments and not-for-profit (NFP)organizations exist in order to provide services needed by the public,or segments of the public,and are not concerned with the generation of net income:
A)Explain concisely why governmental and NFP administrators should be concerned with the determination of costs of services rendered?
B)Explain concisely why governmental and NFP administrators should understand the relationships between cost determination and budgeting.In your answer be sure to identify clearly the relationships you are discussing.

Accepted Answer

The answer of If governments and not-for-profit (NFP)organizations exist in...

Question 15

One of the major advantages of incremental budgeting is that it focuses largely on inputs.

Accepted Answer

A) True 
 B)False

Question 16

Balanced scorecards integrate all of the following into a document that can be shared with employees and stakeholders except

Accepted Answer

A) GASB financial reporting standards. 
B) Internal business processes measures. 
C) Nonfinancial measures,such as customer satisfaction. 
D) Financial performance measures.

Question 17

If the revenues budget of a government is prepared on the modified accrual basis is there any reason why the revenues budget should be converted to a cash receipts budget? Explain.

Accepted Answer

The answer of If the revenues budget of a government...

Question 18

What is the name of the type of budgeting in which the very existence of each activity should be justified each year? Elaborate.

Accepted Answer

The answer of What is the name of the type...

Question 19

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

Accepted Answer

A) Number of crimes investigated. 
B) Value of property lost due to crime. 
C) Hours of patrol. 
D) Number of personnel hours expended.

Question 20

A major advantage of activity-based costing (ABC)is that it reduces unit cost distortions arising from overhead allocations that often occur using traditional cost accounting systems.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Not-For-Profit Organizations

Effective capital budgeting for general capital assets of a government requires

Some of the budgeting approaches governments have experimented with as alternatives to line-item,incremental budgeting include performance budgeting,program budgeting,the planning-programming-budgeting system,and zero-based budgeting.

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

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

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

Effective financial management requires information about capital assets,including nonfinancial information such as physical measures of capital assets,their service condition,and estimated replacement schedule.

In budgeting for the inflow of financial resources,government officials must concern themselves with revenues and other financing sources.

Traditional governmental accounting is better suited to determination of costs than to determination of benefits.

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

Name at least three criteria that must be met for costs to be allowable under OMB circulars.

The sole purpose of preparing a governmental budget is to show compliance with laws and regulations.

One of the major advantages of incremental budgeting is that it focuses largely on inputs.

Balanced scorecards integrate all of the following into a document that can be shared with employees and stakeholders except

If the revenues budget of a government is prepared on the modified accrual basis is there any reason why the revenues budget should be converted to a cash receipts budget? Explain.

What is the name of the type of budgeting in which the very existence of each activity should be justified each year? Elaborate.

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

A major advantage of activity-based costing (ABC)is that it reduces unit cost distortions arising from overhead allocations that often occur using traditional cost accounting systems.