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

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Exam style questions across every GAFRB domain

Last Update 23 hours ago
Total Questions : 115

Start with our free GAFRB practice questions, carefully crafted to mirror the domains, phrasing, and difficulty of the real Government Financial Manager exam. Each GAFRB exam question comes with a detailed rationale that explains not just which answer is correct but why the others fall short. That's how concepts stick. Use the free set to benchmark yourself: identify your AGA weak domains, see where you're losing marks, and build a focused study plan in minutes.

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Question # 11

What role do the U.S. Department of the Treasury, GAO and OMB have in the standard-setting activities of FASAB?

Options:

A.  

They are all non-voting advisory board members of FASA

B.  

B.  

They are all members with authority to veto any standard approved by FASA

B.  

C.  

They are all members whose agencies may be exempt from FASAB standards.

D.  

They are all sponsors and voting members of FASA

B.  

Discussion 0
Question # 12

A county is projecting a $7 million budget deficit in the upcoming fiscal year, so the county board, who acts as the highest level of authority for the county, sets aside $7 million in fund balance to close this gap. How should the $7 million be classified on the financial statement?

Options:

A.  

Restricted Fund Balance

B.  

Assigned Fund Balance

C.  

Nonspendable Fund Balance

D.  

Committed Fund Balance

Discussion 0
Question # 13

GASB establishes standards through a

Options:

A.  

unanimous vote of the board members, after discussing the results of written and oral comments offered by interested parties on an exposure draft submitted by GASB staff.

B.  

vote of the majority of board members, after discussing the results of a preliminary views document submitted by GASB staff.

C.  

unanimous vote of the board members, confirming that the standards would improve the usefulness of financial reports.

D.  

vote of the majority of board members, after discussing the written and oral comments offered by interested parties on an exposure draft of a statement of proposed standards.

Discussion 0
Question # 14

Government, public, private and not-for-profit entities all share which common goal of financial reporting?

Options:

A.  

provide users with decision support

B.  

provide users with the current status of the entity

C.  

inform users about the ability of the entity to generate revenue

D.  

demonstrate the nature of cash receipts and disbursements

Discussion 0
Question # 15

To capitalize a research and development asset, it must

Options:

A.  

be used for a federal research project.

B.  

be approved by the agency head.

C.  

have acquisition value of at least $100.000.

D.  

have alternative future use.

Discussion 0
Question # 16

The capitalization of interest begins when all of the following conditions are met EXCEPT

Options:

A.  

the contract is signed for purchasing the asset.

B.  

outlays for the asset have been made.

C.  

interest cost is being incurred.

D.  

activities are in progress to get the asset ready for its intended use.

Discussion 0
Question # 17

A governmental financial reporting entity is comprised of all of the following EXCEPT

Options:

A.  

the primary government.

B.  

any organization for which records are kept by the primary government.

C.  

organizations for which the primary government is financially accountable.

D.  

other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Discussion 0
Question # 18

Information is reported in the notes to the financial statements to support all of the following goals EXCEPT to

Options:

A.  

provide narrative information.

B.  

provide detailed information that is not described in the basic financial statements.

C.  

satisfy disclosure requirements.

D.  

provide information in a timely and comparable format.

Discussion 0
Question # 19

In state and local financial audits, material weaknesses must be reported to the

Options:

A.  

legislature.

B.  

governing body.

C.  

taxpayers.

D.  

local media.

Discussion 0
Question # 20

Separate fund financial statements should be presented for

Options:

A.  

net assets and activities.

B.  

governmental and proprietary funds.

C.  

long-term debt.

D.  

capital assets.

Discussion 0

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