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CGFM EXAM 2 (CERTIFIED GOVERNMENT
FINANCIAL MANAGER – CGFM EXAM 2)
2024-2025 WITH 300 QUESTIONS AND
CORRECT ANSWERS (BRAND NEW!)
II 1.A county government operates on a July 2017-June 2018 fiscal year and has budgeted $300 million in property tax revenue for the current fiscal year. As of June 2018, the county had received $283.2 million in property tax revenue. The following month, the county received an additional $7.2 million. In September 2018, the county received an additional $3.7 million. Using the modified accrual approach to accounting, how much property tax revenue should be recognized in
fiscal year 2017-18? - ANSWER-Correct Answer: $290.4 million
II 2.At the state and local level, government-wide financial statements -
ANSWER-Correct Answer: include the statement of net assets or position.
II 3.A government that records a deferred inflow for revenue not received, within
60 days of the end of the fiscal year, is using - ANSWER-Correct Answer: the
modified accrual basis of accounting.
II 4.The GASB standards for determining a reporting entity include consideration
of the entity's - ANSWER-Correct Answer: financial accountability.
II 5.The general fund of a city provides a $100,000 annual subsidy to the city-
owned golf course. This subsidy is an example of - ANSWER-Correct Answer: an
interfund transfer.
II 6.An expenditure-driven, federal, three-year grant has a total award amount of $600,000 and a first-year budget of $200,000. Actual first-year expenditures are 1 / 4
pg. 2 $195,000, of which $170,000 has been billed and received prior to the June 30 fiscal year end. The remaining $25,000 will be billed and received in July. What is the total amount of grant revenue that should be recognized for the first fiscal year,
ending June 30? - ANSWER-Correct Answer: $195,000
II 7.To record infrastructure using the modified approach, upgrading fiber cables of a state's communication network to allow data to flow at higher speeds should be -
ANSWER-Correct Answer: capitalized as an improvement to infrastructure.
II 8.The notes to the financial statements are required, if applicable, to include all
of the following EXCEPT - ANSWER-Correct Answer: demographic and
economic information.
II 9.If a business remits city sales taxes to the state tax agency, which then passes the taxes down to the municipality, a city using the accrual basis of accounting
should record this revenue during the period when - ANSWER-Correct Answer:
the business earns the revenue upon which the taxes are incurred.
II 10.A government established an encumbrance for a computer for $3,000 to be paid out of restricted fund balance. The actual cost of the computer ended up being $2,800. Looking at the image on the left, what journal entries should be made at
the time of payment? - ANSWER-Correct Answer: Option 1
II 11.Which type of fund is used to record state employee's voluntary retirement
contributions? - ANSWER-Correct Answer: fiduciary fund
II 12.In state and local governments, the MD and A includes - ANSWER-Correct
Answer: an analysis of the significant variances between budgeted and actual
amounts.
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pg. 3 II 13.In contrast to fund-based reporting, government-wide financial statements -
ANSWER-Correct Answer: aggregate financial activity across funds.
II 14.All of the following are purposes of the basic financial statements of a city
EXCEPT to - ANSWER-Correct Answer: provide summary information and
reports.
II 15.All of the following are characteristics of the reporting requirements of fiduciary funds in state and local government financial statements EXCEPT -
ANSWER-Correct Answer: they are reported at the government-wide level.
II 16.A pension plan in which plan assets are pooled for investment purposes, but separate accounts are maintained for each individual, is called - ANSWER-Correct
Answer: an agent employer plan.
II 17.Which GASB statement established the MD and A as RSI? - ANSWER-
Correct Answer: GASB 34
II 18.According to GASB Statement No. 39, which potential component unit could be reported as a component unit to the primary reporting entity? - ANSWER-
Correct Answer: legally separate, tax-exempt entities
II 19.A government purchases vehicles for its fire department at a cost of $350,000. Looking at the image on the left, how would this purchase be recorded
on the government-wide statements? - ANSWER-Correct Answer: Option 4
II 20.In government accounting, capital assets are reported in all of the following
EXCEPT - ANSWER-Correct Answer: governmental funds.
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pg. 4 II 21.A law was passed and signed by the governor, which required the first $1,000,000 received from cigarette taxes to be used for a smoking cessation program in the subsequent year. In which category, in the fund balance section of the Governmental Fund Balance Sheet, should this amount be reflected? -
ANSWER-Correct Answer: Committed Fund Balance
II 22.Where is the reconciliation between federal budgetary and proprietary
accounting reported? - ANSWER-Correct Answer: on a separate schedule or in the
notes
II 23.A situation where a government's potential losses are heightened because a significant portion of its resources are invested with a single issuer is - ANSWER-
Correct Answer: a concentration of credit risk.
II 24.Governmental funds use the - ANSWER-Correct Answer: current financial
resources measurement focus and modified accrual basis of accounting.
II 25.A government borrows $500,000 to be repaid equally over six years, beginning the following fiscal year. Looking at the image to the left, how would the transaction be recorded using the modified accrual basis? - ANSWER-Correct
Answer: Option 2
II 26.A public school district located in eastern Kansas is considered a primary
government because - ANSWER-Correct Answer: it has a separately elected
governing body.
II 27.A city and county combine operations, which results in the city ceasing to exist because the city operations are now provided by the county; there is no significant consideration exchanged. This is an example of - ANSWER-Correct
Answer: a merger.
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