Ch. 12 - Nfp

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  • 1/20 Questions

    Governmental budgets must be made available for public scrutiny, and public hearings must be held to provide adequate opportunity for citizens' input, prior to legislative adoption of the budget.

    • True
    • False
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Ch. 12 - Nfp - Quiz
About This Quiz

Explore key aspects of budgeting in public sector through 'Ch. 12 - NFP'. Assess your understanding of budgetary principles, steps in the budgeting process, and performance-based budgeting in state and local governments. This quiz is vital for those studying public administration or accounting.

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  • 2. 

    The budgetary comparison schedule required of state and local governments under GASB standards:

    • Can be presented as required supplementary information (RSI) or as a statement in the basic financial statements

    • Must be a schedule included as part of RSI

    • Continues to be a statement included in the basic financial statements

    • Is no longer required

    Correct Answer
    A. Can be presented as required supplementary information (RSI) or as a statement in the basic financial statements
    Explanation
    The budgetary comparison schedule required of state and local governments under GASB standards can be presented as required supplementary information (RSI) or as a statement in the basic financial statements. This means that governments have the option to include the schedule either as part of the RSI section or as a separate statement within the basic financial statements. The flexibility allows governments to choose the most appropriate format for presenting the budgetary comparison schedule based on their specific reporting needs and requirements.

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  • 3. 

    A benefit of using activity-based costing in a government is that it:

    • Is a useful tool for measuring the cost of key administrative office activities

    • Helps identify lower cost alternatives

    • Aids in reducing the cost of service outcomes

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Activity-based costing is a useful tool for measuring the cost of key administrative office activities in a government. By accurately allocating costs to specific activities, it helps identify lower cost alternatives and aids in reducing the overall cost of service outcomes. Therefore, all of the above statements are correct.

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  • 4. 

    Public sector budgets:

    • Are integrated with the financial accounting system

    • Enable governments to demonstrate compliance with laws and to communicate performance effectiveness

    • Are adopted by governments after required public hearings

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    The correct answer is "All of the above" because public sector budgets are indeed integrated with the financial accounting system, which allows for effective management and tracking of funds. Additionally, these budgets enable governments to demonstrate compliance with laws and regulations, ensuring transparency and accountability. Finally, public sector budgets are adopted by governments after required public hearings, allowing for public input and ensuring that the budget aligns with the needs and priorities of the community.

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  • 5. 

    An approach to budgeting that requires the very existence of each program and the amount of resources requested to be allocated to that program to be justified each year is called:

    • Incremental budgeting

    • Zero-based budgeting

    • Performance budgeting

    • Planning-programming-budgeting

    Correct Answer
    A. Zero-based budgeting
    Explanation
    Zero-based budgeting is an approach to budgeting that requires each program's existence and the amount of resources requested to be justified each year. Unlike incremental budgeting, which assumes the previous year's budget as a baseline and makes adjustments, zero-based budgeting starts from scratch and requires a thorough evaluation of each program's costs and benefits. This approach ensures that resources are allocated based on the program's current needs and priorities, promoting efficiency and accountability in budgeting decisions. Performance budgeting and planning-programming-budgeting are different budgeting approaches that focus on evaluating program performance and aligning budgeting decisions with organizational goals.

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  • 6. 

    Which of the following steps would not usually be part of the budgeting process?

    • Heads of operating departments prepare budget requests

    • The chief executive (mayor or city manager, as appropriate) formally adopts the budget, thus giving it the force of law

    • One or more public budget hearings are held

    • Budget officer and other central administrators review and make adjustments to departmental requests

    Correct Answer
    A. The chief executive (mayor or city manager, as appropriate) formally adopts the budget, thus giving it the force of law
    Explanation
    The budgeting process involves the preparation of budget requests by heads of operating departments, review and adjustments by central administrators, and holding public budget hearings. The final step in the process is the formal adoption of the budget by the chief executive, which gives it the force of law. Therefore, this step is usually part of the budgeting process.

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  • 7. 

    The budgeting principle in generally accepted accounting principles (GAAP) for state and local governments state that:

    • The accounting system should provide the basis for appropriate budgetary control

    • Budgetary comparison schedules should be presented as required supplementary information for the General Fund and each major special revenue fund that has a legally adopted budget

    • Annual budgets should be adopted by each government

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    The correct answer is "All of the above". This means that all three statements are true and are part of the budgeting principle in generally accepted accounting principles (GAAP) for state and local governments. The accounting system should provide the basis for appropriate budgetary control, budgetary comparison schedules should be presented for the General Fund and major special revenue funds, and annual budgets should be adopted by each government. These principles ensure proper financial management and transparency in the budgeting process.

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  • 8. 

    All of the following are true statements about budgeting for performance in a governmental entity except:

    • There are few examples of successful improvements in budgeting processes that have resulted in higher quality and performance of governments

    • The GFOA's Distinguished Budget Presentation Award Program has spurred many governments to improve their budgeting processes and be recognized for it

    • Some states have passed legislation that requires performance measures, both financial and nonfinancial

    • Governments have adapted many private sector budgeting tools in an attempt to improve efficiency and deliver higher quality services to taxpayers

    Correct Answer
    A. There are few examples of successful improvements in budgeting processes that have resulted in higher quality and performance of governments
    Explanation
    The correct answer suggests that there are actually many examples of successful improvements in budgeting processes that have resulted in higher quality and performance of governments. This contradicts the statement that there are few examples.

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  • 9. 

    Efficiency measures, as the term is used in the service efforts and accomplishments (SEA) literature, can be described as:

    • Measures that relate the quantity or cost of resources used to units of output

    • Measures that relate to the amount of financial and nonfinancial resources used in a program or process

    • Measures that relate costs to outcomes

    • Measures that reflect either the quantity or quality of a service provided

    Correct Answer
    A. Measures that relate the quantity or cost of resources used to units of output
    Explanation
    Efficiency measures in the service efforts and accomplishments (SEA) literature refer to measures that relate the quantity or cost of resources used to units of output. This means that efficiency measures focus on determining how effectively resources are utilized in producing a certain level of output. By measuring the quantity or cost of resources used in relation to the units of output, organizations can assess their efficiency in utilizing resources and identify areas for improvement. This measure helps in evaluating the effectiveness of a program or process in achieving its desired outcomes while minimizing resource wastage.

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  • 10. 

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

    • Planning-programming-budgeting.

    • Incremental budgeting

    • Zero-based budgeting

    • Performance budgeting

    Correct Answer
    A. Incremental budgeting
    Explanation
    Incremental budgeting is an often used approach to budgeting where the subsequent year's budget is derived from the current year's budget. This means that the budget for the next year is based on making incremental changes or adjustments to the current budget, rather than starting from scratch or re-evaluating every expense. This approach is often used when there is a need for stability and continuity in budgeting, as it allows for small adjustments and improvements over time without significant disruptions.

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  • 11. 

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

    • Budget docket

    • Legal timetable

    • Hearing schedule

    • Budget calendar

    Correct Answer
    A. Budget calendar
    Explanation
    The schedule of legally required events in the budgeting process is commonly known as the budget calendar. This calendar outlines important dates and deadlines for budget-related activities such as hearings, reviews, and approvals. It helps ensure that all necessary steps in the budgeting process are followed in a timely manner and allows stakeholders to plan and prepare accordingly.

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  • 12. 

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

    • An annual budget must be adopted using generally accepted accounting principles.

    • The accounting system should provide the basis for appropriate budgetary control.

    • 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.

    • The budgetary comparison schedule should present both the original and the final appropriated budgets for the reporting period.

    Correct Answer
    A. An annual budget must be adopted using generally accepted accounting principles.
    Explanation
    The GASB's "Budgeting, Budgetary Control, and Budgetary Reporting Principle" does not require that an annual budget be adopted using generally accepted accounting principles.

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  • 13. 

    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:

    • The chief financial officer

    • The legislative budget analyst

    • The budget officer

    • The director of finance

    Correct Answer
    A. The budget officer
    Explanation
    The budget officer is typically responsible for providing department heads with technical support such as clerical assistance with budget computation and maintenance of document files relating to the budget. This role involves assisting in budget planning, monitoring expenditures, and ensuring compliance with financial regulations. The budget officer works closely with department heads to provide guidance and support in managing their budgets effectively.

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  • 14. 

    The type of budgeting that relates input of resources to output of services is zero-based budgeting.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Zero-based budgeting is a type of budgeting that requires all expenses to be justified for each new budget period, regardless of whether they were included in the previous budget or not. It does not specifically relate the input of resources to the output of services. Therefore, the given statement is false.

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  • 15. 

    Under GASB standards, every government, regardless of its size, is instructed to prepare a cash budget for each month of the fiscal year.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Under GASB standards, every government is not instructed to prepare a cash budget for each month of the fiscal year. The statement is false because GASB standards do not require governments to prepare a cash budget for each month. While it is encouraged for governments to have a budgeting process in place, the specific frequency and format of the budget is not mandated by GASB.

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  • 16. 

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

    • Number of crimes investigated

    • Value of property lost due to crime

    • Hours of patrol

    • Number of personnel hours expended

    Correct Answer
    A. Value of property lost due to crime
    Explanation
    The value of property lost due to crime can be appropriately termed as an outcome indicator for a police department that reports service efforts and accomplishments (SEA) indicators because it reflects the impact of the department's efforts in preventing and solving crimes. This indicator provides information about the effectiveness of the department's strategies and interventions in reducing the financial losses experienced by the community due to criminal activities.

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  • 17. 

    State and local governments and nonprofit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with:

    • Cost Accounting Standards Board standards.

    • Office of Management and Budget cost circulars.

    • Financial Accounting Standards Board standards.

    • Governmental Accounting Standards Board standards.

    Correct Answer
    A. Office of Management and Budget cost circulars.
    Explanation
    State and local governments and nonprofit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with the Office of Management and Budget cost circulars. This means that they should follow the guidelines and regulations set forth by the Office of Management and Budget when it comes to accounting for the costs associated with these grants or contracts. These cost circulars provide specific instructions on how to allocate and track costs, ensuring that the funds are used appropriately and in accordance with federal regulations.

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  • 18. 

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

    • Governmental fund type

    • Fund of a government

    • Government

    • Governmental fund type except capital projects funds.

    Correct Answer
    A. Government
    Explanation
    The GASB "Budgeting Principle" states that an annual budget should be adopted by every government. This means that all levels of government, whether it be federal, state, or local, should have a budget in place for each fiscal year. This budget helps to outline the government's financial plans and priorities, ensuring that resources are allocated effectively and transparently. It also allows for accountability and oversight, as the budget can be used as a tool to track and monitor the government's financial performance and adherence to its goals and objectives.

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  • 19. 

    Which of the following provides guidance to government managers and auditors in determining appropriate and allowable costs chargeable to federal grants and contracts for not-for-profit organizations?

    • OMB Circular A-102, "Grants and Cooperative Agreements with State and Local Governments."

    • OMB Circular A-110, "Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations."

    • OMB Circular A-122, "Cost Principles for Non-Profit Organizations."

    • OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations."

    Correct Answer
    A. OMB Circular A-122, "Cost Principles for Non-Profit Organizations."
    Explanation
    OMB Circular A-122, "Cost Principles for Non-Profit Organizations," provides guidance to government managers and auditors in determining appropriate and allowable costs chargeable to federal grants and contracts for not-for-profit organizations. This circular specifically outlines the cost principles that govern the use of federal funds and helps ensure that costs charged to grants and contracts are reasonable, necessary, and comply with federal regulations. It provides detailed guidance on direct costs, indirect costs, cost allocation, and other cost-related considerations for non-profit organizations.

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  • 20. 

    Governments that choose to report service efforts and accomplishments (SEA):

    • Must adhere to GASB SEA guidance

    • Must adhere to GASB SEA guidance only if the SEA report is part of the CAFR

    • Must adhere to guidance provided by the Association of Government Accountants (AGA), because GASB has not issued standards addressing SEA

    • May refer to guidance provided by the GASB, the AGA, or other professional organizations

    Correct Answer
    A. May refer to guidance provided by the GASB, the AGA, or other professional organizations
    Explanation
    Governments that choose to report service efforts and accomplishments (SEA) have the option to refer to guidance provided by the GASB, the AGA, or other professional organizations. This means that they are not required to adhere to GASB SEA guidance exclusively, nor are they required to follow the guidance provided by the AGA. They have the flexibility to choose the guidance that best suits their needs and preferences.

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Quiz Review Timeline (Updated): Mar 22, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 04, 2013
    Quiz Created by
    R_man

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