QUESTION 1

Budgets of government entities

1. Are integrated with the financial accounting system.

2. Enable governments to demonstrate compliance with laws and to communicate performance effectiveness.

3. Are adopted by governments after required public hearings.

4. All the above

QUESTION 2

Which of the following statements regarding budgets of not-for-profit organizations is true?

1. Not-for-profit organization budgets are legal documents reflecting plans for spending resources.

2. A not-for-profit entity may choose to prepare a budget to demonstrate accountability to its resource providers, such as donors and grantors.

3. The budgeting approaches used for governments generally cannot be used by not-for-profit entities.

4. All of the above statements are true.

QUESTION 3

Which of the following steps would not usually be part of the budgeting process?

1. Heads of operating departments prepare budget requests.

2. The chief executive (mayor or city manager, as appropriate) formally adopts the budget, thus giving it the force of law.

3. One or more public budget hearings are held.

4. Budget officer and other central administrators review and make adjustments to departmental requests.

QUESTION 4

The budgeting principle in generally accepted accounting principles (GAAP) for state and local governments states that:

1. The accounting system should provide the basis for appropriate budgetary control.

2. Budgetary comparison should be presented for the General Fund and each major special revenue fund that has a legally adopted budget. The budgetary comparison should present both (a) the original and (b) the final appropriated budgets for the reporting period as well as (c) actual inflows, outflows, and balances, stated on the government's budgetary basis.

3. Annual budgets should be adopted by every governmental unit.

4. All of the above.

QUESTION 5

The budgetary comparisons required of state and local governments under GASB standards:

1. Can be presented as a schedule within required supplementary information (RSI) or as a statement in the basic financial statements

2. Must be a schedule included as part of RSI.

3. Continues to be a statement included in the basic financial statements.

4. Is no longer required.

QUESTION 6

An approach to budgeting that requires the very existence of each program and the amount of resources requested to be allocated to that program to be justified each year is called:

1. Incremental budgeting.

2. Zero-based budgeting.

3. Performance budgeting.

4. Planning-programming-budgeting.