QUESTION: 11

Which of the following government-wide financial statements are required for state and local governments?

balance sheet and operating statement
statement of net position and statement of changes in net position
statement of net position and statement of activities
statement of net position, statement of activities, and statement of cash flows

Answer(s): C

Explanation:

The government-wide financial statements required by GASB Statement No. 34 include:

Statement of Net Position (similar to a balance sheet)

Statement of Activities (similar to an income statement)

These financial statements provide a consolidated view of the government's financial position and activities using the economic resources measurement focus and accrual basis of accounting.

There is no requirement under GASB for a government-wide statement of cash flows.

Relevant Standards and

Reference:

GASB Statement No. 34, Basic Financial Statements--and Management's Discussion and Analysis-- for State and Local Governments

GASB Codification Section 2200: Financial Reporting

GFOA Budgeting Best Practices

Therefore, Option C is correct.

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QUESTION: 12

An example of a non-exchange revenue is

sales taxes.
bond proceeds.
licensing fees.
investment earnings.

Answer(s): A

Explanation:

Non-exchange revenues are those in which a government gives or receives value without directly receiving or giving equal value in return. Sales taxes are a classic example of a non-exchange revenue because the payer (consumer) does not receive a direct, measurable benefit from the government in exchange for the tax paid.

Other examples of non-exchange revenues include property taxes, grants, and fines. In contrast, licensing fees and investment earnings are exchange or exchange-like revenues, since they involve a mutual benefit or earnings return.

Relevant Standards and

Reference:

GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions

GASB Codification Section N50

GFOA Revenue Classification Guidelines

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QUESTION: 13

A budget document that lists the budget by social services, affordable housing and supplies includes which of the following significant elements?

function, program, object class
organizational unit, program, category
function, category, object class
program, function, category

Answer(s): A

Explanation:

A well-structured budget document typically categorizes spending in three key ways:

Function: Broad purpose or mission, such as public safety, social services, or housing.

Program: Specific activities or initiatives under a function (e.g., housing vouchers under affordable housing).

Object Class: The type of goods or services purchased, such as personnel, supplies, or equipment.

When a budget is organized by items like social services (function), affordable housing (program), and supplies (object class), it indicates the budget is categorized by those three significant elements.

Relevant Standards and

Reference:

OMB Circular A-11, Preparation, Submission, and Execution of the Budget

GAO Budget Glossary

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QUESTION: 14

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

$ 3,989,400
$ 4,909,400
$ 5,029,400
$25,147,000

Answer(s): D

Explanation:

Under FASAB standards, specifically SFFAS No. 4, Managerial Cost Accounting Standards, the full cost of an output includes:

Direct costs (e.g., direct material and labor)

Indirect costs (e.g., inter-entity costs, overhead, services)

In-kind contributions

Any support service costs

Depreciation or amortization, if applicable

We will now compute the full cost of all 5 units and then divide by 5 to obtain the cost per unit.

Step 1: List and sum all relevant costs.

Direct Material: $11,267,000

Direct Labor: $5,980,000

Inter-entity Costs: $1,500,000

Accounting and Contracting Services: $500,000

Physical and Data Security: $700,000

In-kind Logistics Services: $500,000

Warehouse Lease: $1,000,000

Parking Lot Construction: $3,000,000

Equipment Installation: $600,000

New Employee Training: $100,000

Total Full Cost =

$11,267,000

$5,980,000

$1,500,000

$500,000

$700,000

$500,000

$1,000,000

$3,000,000

$600,000

$100,000

= $25,147,000

Step 2: Calculate cost per unit (based on 5 outputs):

Cost per unit = $25,147,000 ÷ 5 = $5,029,400

But the question specifically asks:

"Based on FASAB standards, calculate the full cost of 1 unit of an output..."

So, the correct answer (full cost of all units) is:

Answer : D. $25,147,000

If they had asked for cost per unit, then the answer would be:

= $5,029,400 Option C

Note: Option C is a distractor here and would only be correct if the question specifically asked for per unit cost.

Relevant Standards and

Reference:

FASAB Statement of Federal Financial Accounting Standards (SFFAS) No. 4: Managerial Cost Accounting Concepts and Standards

OMB Circular A-136: Financial Reporting Requirements

Treasury Financial Manual (TFM), Volume I, Part 2, Chapter 4700

Therefore, the correct answer to the full cost (not per unit) is:

Answer : D. $25,147,000.

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QUESTION: 15

The unobligated balance of an appropriation is equal to the total unexpended appropriation, less the total amounts

obligated.
allotted.
collected.
apportioned.

Answer(s): A

Explanation:

The unobligated balance of an appropriation refers to the portion of the total appropriation authority that has not yet been committed (obligated) through contracts, purchase orders, or other legally binding agreements.

Formula:

Unobligated Balance = Total Appropriation Total Obligations

This is a key control metric in federal and state financial management, used to determine how much funding remains legally available for future obligations.

Relevant Standards and

Reference:

OMB Circular A-11, Section 20.3

GAO Principles of Federal Appropriations Law (Red Book)

FASAB SFFAS No. 7: Reporting on Budgetary Resources

Therefore, Option A is correct.

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Free Financial GAFRB Exam Questions (page: 5)

QUESTION: 11

Explanation:

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QUESTION: 12

Explanation:

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QUESTION: 13

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QUESTION: 14

Explanation:

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QUESTION: 15

Explanation:

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