Appendix 7: Answers to Reinforcement Quizzes
Answers to Reinforcement Quiz ñ Section IV, Chapter 1
1. Which of the following is required for performance measurement to
function effectively?
a. an encumbrance accounting system
b. an established goal or target
c. quantifiable indicators of what a program is doing or achieving
d. a cash flow statement
Answer: (b). For performance measurement to function effectively,
there must be an established goal or target against which actual
performance can be measured. None of the other three choices are
relevant to measuring performance.
2. From the perspective of the citizenry, what is the purpose of performance
a. to see if the entity reports in accordance with GAAP
b. to see if the entityís total expenditures do not exceed revenues
c. to help the citizen to assess accountability
d. to see if the financial statements have been audited
Answer: (c). One of the major purposes of performance reporting is to
enable the citizen to assess the accountability of public officials. Citizen
concern with the other three choices in this question can be answered
through financial reporting, as distinguished from performance
3. Which of the following statements is false regarding the uses of
performance measurement and reporting?
a. It helps decision-makers in the resource allocation process.
b. It helps in assessing efficiency, but not effectiveness.
c. It helps citizens assess government performance.
d. It represents managementís assertion regarding performance.
Answer: (b). Performance reporting, which represents managementís
assertion regarding an entityís performance, can help the user of the
report assess both efficiency and effectiveness. Performance
measurement also helps decision-makers in allocating resources.
4. What is the difference between economy and efficiency?
a. There is no difference; the two terms may be used interchangeably.
b. Economy is a resource-usage concept, and efficiency relates to the
extent to which predetermined goals are achieved.
c. Economy relates to the quality of outputs, and efficiency relates to
the quantity of outputs.
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Appendix 7: Answers to Reinforcement Quizzes
d. Both are least-cost notions, but economy relates to the acquisition
of resources and efficiency relates to the usage of resources.
Answer: (d). Although the terms economy and efficiency tend to be
used in the same breath, they have different meanings. Economy is
concerned with acquiring resources at the least cost commensurate
with needs, and efficiency is concerned with using resources at the
least cost.
5. Which of the following pairs of items are needed most when an entity
manages for results?
a statement of goals and objectives and a performance
measurement system
a mission statement and an audited financial statement
a procedures manual and GAAP-based financial statements
an executive budget office and a legislative budget office
Answer: (a). Managing for results requires both a statement of
objectives and a system for measuring the extent to which the stated
objectives have been achieved. Audited financial statements and
GAAP-based statements provide assurances regarding financial
measures used in performance measurement, but they are not central
to managing for results. Further, many measures of results are
nonfinancial in nature.
Online version, for personal use only
AGA Study Guide 3, 2016 Edition

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AGA CGFM Study Guide 3: Governmental Financial Management and Control