Appendix 10: Answers to Reinforcement Quiz ñ Section III, Chapter 2
Answers to Reinforcement Quiz ñ Section III, Chapter 2
1. The Office of Management and Budget (OMB) is only concerned with the
preparation and submission of agency budget requests. True or false?
Answer: False. OMB evaluates the effectiveness of agency programs,
policies and procedures; assesses competing funding demands among
agencies; and sets funding priorities for the presidentís budget. OMB
ensures that agency reports, rules, testimony before Congress and
proposed legislation are consistent with the presidentís budget and with
administration policies. In addition, OMB oversees and coordinates the
administrationís procurement, financial management, information and
regulatory policies. In each of these areas, OMBís primary roles are to
improve administrative and program management, develop better
performance measures and coordinating mechanisms, and reduce any
unnecessary burdens on the public.
2. The U.S. Department of the Treasury is the financial agent of the U.S.
government and performs duties such as disbursing funds, collecting
revenue, managing debt collections, and providing government-wide
accounting and reporting. True or false?
Answer: True.
The Treasury:
.
disburses approximately 950 million federal payments each year on
behalf of agencies;
.
collects federal receipts of more than $2 trillion annually;
.
oversees a daily cash flow of $10 billion;
.
provides centralized debt collection services to agencies; and
.
provides government-wide accounting and reporting.
3. The OMB and Treasury are best described as:
a. lead agencies.
b. control agencies.
c. executive branch agencies.
d. executive branch central financial management agencies.
Answer: (d). Both OMB and Treasury reside in the executive branch and
are known as ìcentral financial management agenciesî. Each has
responsibilities and authorities with respect to financial and/or other
management affairs of the executive branch.
Online version, for personal use only AGA Study Guide 2, 2016 Edition

Appendix 10: Answers to Reinforcement Quiz ñ Section III, Chapter 2
4. Agencies are required by law to do all of the following except:
a. comply with the U.S. Standard General Ledger.
b. follow applicable accounting standards.
c. submit a list of commitments to OMB before funds are disbursed.
d. produce annual audited financial statements.
Answer: (c). Commitments are tracked internally for the benefit of the
managers at an agency. There are no central reporting requirements for
commitments.
5. An obligation is:
a. a binding liability recognized in accordance with GAAP.
b. a binding agreement that will result in outlays (an executory
contract).
c. a payment resulting from a mandatory program.
d. a commitment of Congress.
Answer: (b). Not all obligations are liabilities. Obligations may result from
a mandatory program, but this is not the definition of an obligation.
6. The budgetary equation is ìbudgetary resources = status of budgetary
resources.î True or false?
Answer: True. This basic equation forms the basis of the presentation on
the Statement of Budgetary Resources.
7. An agency must request an apportionment of its appropriation from OMB
even though it has received a Treasury warrant. True or false?
Answer: True. Apportionment is required by the Anti-Deficiency Act to
prevent agencies from overspending early in the fiscal year and
requesting more funding.
8. Once an agency has an appropriation, it may enter into all manner of
transactions, so long as it does not exceed the appropriation. True or
false?
Answer: False. There are a number of requirements for an obligation to
be legal. For example, the agreement for provision of goods or services
must be executed before the expiration of the period of availability of the
appropriation. The agreement should specify the goods to be delivered,
real property to be purchased or leased, or work or services to be
performed.
Online version, for personal use only AGA Study Guide 2, 2016 Edition

Appendix 10: Answers to Reinforcement Quiz ñ Section III, Chapter 2
9. All of the following are correct except:
a.
Allotments result in entries in budgetary accounts, but not
proprietary accounts.
b. Receipt of goods ordered results in entries in both budgetary and
proprietary accounts.
c.
Depreciation expense results in entries in proprietary accounts, but
not budgetary accounts.
d. Destruction of a federal building during a hurricane results in entries
in both budgetary and proprietary accounts.
Answer: (d). There is generally no entry in the budgetary accounts for
events that have not been provided for through appropriations.
10. Congress does not have the authority to change budgetary accounting.
True or false?
Answer: False. Congress can alter the way transactions are reflected in
the budget. For example, the Credit Reform Act changed the budgetary
accounting for loan guarantees so that an estimate of the losses from
guarantees would be ...


































































































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AGA CGFM Study Guide 2: Governmental Accounting, Financial Reporting and Budgeting