Deck 11: Public Financial Management

Question 1

Which of the following statements about the Congressional Budget Office is INCORRECT?

A)It advises Congress on the likely economic effect of different spending programs.
B)It provides information on the cost of proposed policies.
C)It was created in 1921 and originally designed to audit government expenditures.
D)It prepares analysis of the president's budget and economic projections.
E)It gives members of Congress arguments to use in their budget debates.

Answer 1

C

Question 2

In fiscal year 2007 federal expenditures as a percentage of gross domestic product were about

A)5 percent.
B)10 percent.
C)20 percent.
D)30 percent.
E)40 percent.

Answer 2

C

Question 3

About what percentage of federal government spending in 2007 was discretionary? (A) 7
(B) 24
(C) 37
(D) 62
(E) 85

Answer 3

C

Question 4

Under current federal budget procedures, the fiscal year 2011 will begin on

A)September 30, 2011.
B)October 1,2010.
C)January 1, 2012.
D)December 15, 2011.
E)July 1, 2011.

Question 5

refer to the following table.
COMPARISON OF TWO REVENUE SOURCES


-Type B tax is

A)estate, inheritance, and gift taxes.
B)sales tax.
C)user charges.
D)corporate income tax.
E)personal income tax.

Question 6

The top sources of funding for state and local government are

A)individual income taxes and corporate income taxes.
B)individual income taxes and property taxes.
C)sales tax and corporate taxes.
D)intergovernmental revenues and individual income taxes.
E)sales tax and intergovernmental revenue.

Question 7

Which of the following authors identified various strategies managers can and do use in the budget process?

A)Mice Rivlin
B)Mancur Olsen
C)Frederick Mosher
D)Aaron Wildavsky
E)J.B.Colbert

Question 8

Which of the following statements about new performance budgeting is INCORRECT: (A) Earliest application of new performance budgeting came at local and state levels.
(B) The Chief Financial Officers Act of 1990 required financial officers of federal agencies to develop and report systematic measures of performance.
(C) Government Performance and Results Act of 1993 directed agencies to work toward performance budgets.
(D) The first presidential budget to aggressively use agency performance measures was president Bush's budget for fiscal 2003.
(E) Unlike traditional performance budgeting, which focuses on outcomes, new performance budgeting attempts to budget according to the direct outputs or activities of government agencies.

Question 9

The starting point for each year's budget battle is a calculation of the cost of continuing existing programs without change and an adjustment of the costs merely to reflect shifts in work load (e.g., increase in number of clients) and effects of inflation.This estimate is called

A)current services budget.
B)continuing resolution.
C)incremental budget.
D)marginal analysis budget.
E)the Congressional Budget Office Estimate (CBOE).

Question 10

Which statement about the bonds offered by state and local government is INCORRECT?

A)The construction of public university and school buildings, prisons, or mental health institutes are usually financed from bond purchaser revenues.
B)General obligation bonds have the 'full faith and credit" of the general treasury behind the promise that bondholders will be repaid.
C)State and local governments commonly offer two kinds of bonds: general obligation bonds and revenue bonds.
D)Like general obligation bonds, revenue bonds have the resources of the general treasury behind them.
E)Governments may take on short-term debt, usually for a year or less.

Question 11

Currently, the total federal debt as percentage of GDP is about (A) 10
(B) 20
(C) 40
(D) 80
(E) 160

Question 12

Distinguish between the following terms: budget authority, obligations, outlay, and cost.

Question 13

Describe the four basic phases out the federal budget cycle.

Question 14

Which of the following is NOT generally recognized as one of the pragmatic concepts with which a financial manager in the public sector should be acquainted when developing a tax system? (A) horizontal equity
(B) vertical equity
(C) tax efficiency
(D) tax effectiveness
(E) tax overlapping

Question 15

What type of accounting records expenditures when an obligation is incurred (as one records a check when it is written, not when the bank actually makes payment) and records revenues when earned (for example, when taxes are due, not when the taxpayer actually pays)?

A)The Austrian school of accounting
B)Fund accounting
C)Accrual accounting
D)Time-phased accounting
E)Cost accounting

Question 16

The two major areas of expenditure for state and local governments are

A)police and general administration.
B)police and education.
C)education and welfare.
D)interest on debt and highways.
E)welfare and police.

Question 17

How did the Congressional Budget and Impoundment Control Act changed the federal budget cycle?

Question 18

refer to the following table.
COMPARISON OF TWO REVENUE SOURCES


-Type A tax is

A)property tax.
B)sales tax.
C)user charges.
D)corporate income tax.
E)personal income tax.

Question 19

Which of the following concepts is most closely associated with a consumption tax?

A)Estate tax
B)User fees
C)Proportional tax
D)Value-added tax
E)Stabilization

Question 20

Which of the following is an off-budget item?

A)Zero-based budgeting
B)Highway Trust Fund
C)Covert operations by the CIA
D)Form price supports
E)Interest on the national debt

Question 21

According to Allen Schick, there are three purposes of a budget.List these purposes and explain how these purposes shaped the budget's format.

Question 22

What is the capital budget?

Question 23

To make the budget process more flexible, the executive and legislative branches engage in certain compromises.Explain how the following compromises work: backdoor spending, reprogramming, transfers, and supplemental appropriations.

Question 24

Discuss some of the political strategies various agencies, legislators, and interest groups employ during the budgeting process.

Question 25

What is debt management?

Question 26

Discuss the pros and cons of the following six revenue sources: personal income tax; corporate income tax; property tax; a estate, inheritance, and gift taxes; sales tax; and user charges.Note: this question can be we formulated in a variety of ways.For example: "Discuss the pros and cons of the following two revenue sources…."

Question 27

Distinguish accrual accounting from cost accounting.

Question 28

What are the three criteria a financial manager can use to evaluate his or her revenue options?

Question 29

What is the difference between the budget deficit and the national debt? How big a problem is the federal deficit?

Question 30

What is new performance budgeting, and what are some of the difficulties in making it work?

Question 31

Among other things, auditing seeks to determine whether accounting controls prevent fraud.What are some of the more popular methods that have been used to steal from the government?

Question 32

Explain the importance of cash management to state and local governments.

Question 33

Discuss the ways in which policymakers simplify the budget process.

Question 34

Discuss the various proposals to reform federal taxation.

Question 35

Explain uncontrollable expenditures.Why are they a problem?