Appendix 4: Answers to Reinforcement Quizzes
Answers to Reinforcement Quiz ñ Section III
1. Which statement about the planning phase of the management cycle is
least true?
a.
Planning only occurs between the auditing and programming
phases.
b. The role of planning is to determine how objectives will be achieved
during the operations phase.
c.
Planners are constrained by the expected level of resources.
d. Planning is the most creative phase of the management cycle.
Answer: (a). Options (b), (c) and (d) are true statements. The planning
phase receives the most emphasis between auditing and programming,
but in fact, some level of planning occurs throughout the year.
2. Which of the following decisions is most likely to be made during the
programming phase?
a.
decisions about broad goals of government
b. decisions about whether to lease space or construct a new building
c.
decisions about how to respond to an auditorís report
d. decisions about appropriate accounting methods
Answer: (b). ìMake or buyî is an important decision during the
programming phase, when officials link goals and objectives to resources,
and methods for achieving them. The other options are less appropriate.
3. Which is not
a typical output of the programming phase?
a.
most cost-effective means to achieve objectives
b. specific, measurable objectives
c.
level of resources to be requested
d. reprogramming requests
Answer: (d). Options (a), (b) and (c) are indeed primary outputs of the
programming phase. Reprogramming usually comes later, after operations
have commenced and it becomes apparent that added funds are needed
for certain programs, or that priorities have shifted.
4. Typically, which type of budget will be in effect the longest?
a.
operations budget
b. cash flow budget
c.
capital budget
Answer: (c). Because it may take several years to complete a capital
investment project, capital budgets frequently have a life of two or more
years.
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Appendix 4: Answers to Reinforcement Quizzes
5. What is the purpose of forecasting with regard to the budget?
Answer: Determine the likely level of economic activity and economic
trends, and how they will impact revenue and expenses.
6. What publication of the national government provides an effective guide to
internal controls and may be applied at all levels of government?
Answer: The publication is Standards for Internal Control in the Federal
Government, published by the U.S. Government Accountability Office.
7. Which of the following is least supported through financial accounting?
a. information about expenses and intergovernmental transfers
b. information about fund levels and disbursements
c. information about deposits of earmarked receipts
d. information about achievement of program outcomes
Answer: (d). Options (a), (b) and (c) are indeed supported by financial
accounting. However, both financial and nonfinancial information are
required to evaluate the achievement of program outcomes; financial
information alone is inadequate.
8. Which reports make financial results easier for the general citizen to
understand?
a. popular reports
b. audited annual financial reports
c. certified annual financial reports
d. unaudited comprehensive annual financial reports
Answer: (a). ìPopular reportî is a term given to annual financial reports
that have been summarized and presented in a manner easy for the
typical citizen to comprehend.
9. Which body defines GAAP for state and local government?
a. FASAB
b. FASB
c. GASB
d. OMB
Answer: (c). FASAB defines GAAP for the national government; FASB
defines GAAP for private sector companies. OMB does not define GAAP.
10.Compare and contrast internal reports and external reports.
Answer: External reports are often formal and required at the end of the
reporting period. The format and content of external reports may be
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Appendix 4: Answers to Reinforcement Quizzes
prescribed by GAAP, legislation or covenants. In contrast, internal reports
are issued at a time and in a format useful to management.
11.State governments are required by standard-setting bodies to issue
performance reports. True or false?
Answer: False. GASB recommends, but does not require, performance
reporting by state and local governments. In contrast, most federal
agencies are required to report on performance achieved.
12.What is the primary purpose of an external financial audit?
a.
provide independent assessment of cost-effectiveness of programs
b.
provide a conclusion that program objectives have been met
c.
provide an opinion whether or not the financial statements are
presented fairly in accordance with GAAP
Answer: (c). Performance audits and attestation engagements may fulfill
objectives (a) or (b). The financial audit is an evaluation of financial
statements.
13.How does the auditorís role differ from the accountantís role, with regard
to financial ...











































































































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AGA CGFM Study Guide 1: Governmental Environment