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GAFRB Practice Exam Questions and Answers

Examination 2: Governmental Accounting, Financial Reporting and Budgeting (GAFRB)

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Total Questions : 115

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Question # 1

A local government is evaluating different financing options for an upcoming capital project. Which of the following debt instruments will typically offer the lowest interest rate?

Options:

A.  

commercial paper

B.  

general obligation bonds

C.  

revenue bonds

D.  

certificate of deposit

Discussion 0
Question # 2

For state and local governments, a fund that is legally restricted to the use of earnings with the principal protected is

Options:

A.  

an enterprise fund.

B.  

a permanent fund.

C.  

an internal service fund.

D.  

a general fund.

Discussion 0
Question # 3

Which federal agency activities would most likely use a trust fund to account for funds received and paid?

Options:

A.  

general government programs receiving annual appropriations

B.  

provisions of benefits, goods or services financed by specific revenue sources

C.  

business-type operations financed by exchange revenues

D.  

grant programs distributing funds awarded in prior years

Discussion 0
Question # 4

The four general government auditing standards are

Options:

A.  

compliance, timeliness, qualifications and due professional care.

B.  

supervision, planning, management controls and evidence.

C.  

planning, internal controls, independence and irregularities.

D.  

qualifications, independence, due professional care and quality control.

Discussion 0
Question # 5

What is the annual projected sales tax revenue if in nine months the revenue earned is $26.5 million, and no other factors are known?

Options:

A.  

$26.5 million

B.  

$35.3 million

C.  

$40.0 million

D.  

$53.0 million

Discussion 0
Question # 6

Based on FASAB standards, calculate the full cost of 1 unit of an output using the following information:

Options:

A.  

$ 3,989,400

B.  

$ 4,909,400

C.  

$ 5,029,400

D.  

$25,147,000

Discussion 0
Question # 7

GASB considers interperiod (intergenerational) equity when

Options:

A.  

evaluating grant recipient awards.

B.  

performing historical trend analysis.

C.  

issuing financial reporting guidelines.

D.  

selecting alternatives in budgeting procedures.

Discussion 0
Question # 8

The Federal Financial Management Improvement Act of 1996 formally recognized which of the following organizations as the standard-setting body for federal accounting and reporting standards?

Options:

A.  

OMB

B.  

FASB

C.  

GAO

D.  

FASAB

Discussion 0
Question # 9

The measurement focus of the governmental fund level financial statements is

Options:

A.  

modified accrual basis.

B.  

economic resources.

C.  

current financial resources.

D.  

accrual basis.

Discussion 0
Question # 10

If an internal service fund needs to develop an hourly billing rate, the calculation should include

Options:

A.  

all materials consumed during the year.

B.  

the acquisition cost of equipment purchased during the year.

C.  

the replacement cost of equipment purchased during the year.

D.  

all materials purchased during the year, even if the materials were not consumed.

Discussion 0
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