Question 1

For a typical city government,the budget has an important influence on the determination of the annual

Accepted Answer

Property taxes are typically the largest source of revenue for local governments, and therefore the budget has a significant impact on the determination of the property tax rate. The other taxes listed may also be affected by the budget, but to a lesser extent.

Question 2

If the balance in the Estimated revenues account exceeds the balance in the Appropriations account

Accepted Answer

If the balance in the Estimated revenues account exceeds the balance in the Appropriations account, it means that more revenue is expected than the amount of money appropriated for expenses. This results in a surplus in the Budgetary fund balance account, which would have a credit balance.

Question 3

Which of the following approaches to budgeting requires each activity to be justified each year?

Accepted Answer

Zero-based budgeting approach requires each activity to be justified each year based on its contributions to the organization's goals and objectives, and the funding is allocated accordingly. This approach helps ensure that resources are allocated effectively and efficiently, and it encourages managers to scrutinize each activity to identify inefficiencies and opportunities for improvement.

Question 4

The Governmental Accounting Standards Board requires governments to include budgetary comparison schedules or statements for which of the following funds?

Accepted Answer

The Governmental Accounting Standards Board (GASB) requires budgetary comparison schedules or statements for the General Fund and major special revenue funds, but not for all governmental funds or capital projects funds.

Question 5

The largest revenue source in a city government's General Fund normally is

Accepted Answer

Property taxes are typically the largest revenue source in a city government's General Fund. These taxes are collected on all real estate within the city limits, and contribute a significant portion of the city's overall revenue. Other sources such as fines and forfeits, interest on investments, and charges for building inspections, while important, typically do not generate as much revenue as property taxes.

Question 6

If actual revenues are less than estimated revenues and expenditures are less than appropriations (by the same amount),at the end of the fiscal year

Accepted Answer

If actual revenues are less than estimated revenues and expenditures are less than appropriations (by the same amount), it means that the actual change in fund balance is equal to the budgeted change in fund balance. This is because the actual revenues and expenditures cancelled each other out, resulting in the same amount of change in fund balance as was budgeted. Therefore, the best answer is A.

Question 7

A property tax millage rate is calculated by:

Accepted Answer

The answer of A property tax millage rate is calculated...

Question 8

When the chief executive of a governmental unit submits a "balanced budget" to the legislative body,it usually means that:

Accepted Answer

A balanced budget typically means that the proposed expenditures do not exceed the estimated monies available for the year, encompassing all sources of revenue, not just tax revenues.

Question 9

Which statement most accurately describes the use of cash forecasts in government?

Accepted Answer

Cash forecasts are necessary in government because the timing of cash inflows does not always match the timing of cash outflows. This means that governments may need to borrow or invest cash in order to cover expenses during periods where there is a shortfall. Cash forecasts help governments plan for these situations and ensure that they have the necessary resources available.

Question 10

Which of the following activities occurs closest to the completion of the budgetary process?

Accepted Answer

Holding public budget hearings typically occurs towards the end of the budgetary process, after revenue estimates have been prepared, capital outlay requests have been summarized, and the budget calendar has been established. Public budget hearings provide an opportunity for community members to provide feedback on the proposed budget before it is finalized.

Question 11

When preparing a fund budget for the next fiscal year,which of the following are important to consider when projecting the amount of resources that will be available for spending in the next year?

Accepted Answer

It is important to consider the probable fund balance at the end of the current year (choice B) as it will affect the starting point for the next fiscal year's budget. It is also necessary to project the fund revenues to be realized for the next year (choice D) in order to determine the total amount of resources available for spending. Therefore, both options B and D are important to consider when projecting the amount of resources that will be available for spending in the next year.

Question 12

Which type of budget is concerned with day-to-day spending and financing activities?

Accepted Answer

An operating budget is concerned with day-to-day spending and financing activities of an organization. It includes expenses such as salaries, utilities, and supplies, and revenue sources such as sales and investments. A general budget refers to a comprehensive financial plan for an organization, while a capital budget focuses on long-term investments in assets such as property, equipment, and infrastructure. A balanced budget refers to a budget in which expenses are equal to or less than revenue.

Question 13

Which of the following classifications will not appear in the annual budget for a General Fund?

Accepted Answer

Depreciation is not a budgeted item for the General Fund because it is a non-cash expense related to the use of capital assets, which are accounted for in proprietary and fiduciary funds, not governmental funds like the General Fund.

Question 14

Which of the following approaches to budgeting is most likely to contain the details of salaries (such as number of personnel within each position)as well as the details of each type of expenditure other than salaries (such as supplies and travel)?

Accepted Answer

The object-of-expenditure approach to budgeting focuses on the specific items or categories of spending, such as salaries, supplies, and travel. This approach provides detailed information about each type of expenditure, including the number of personnel and the costs associated with each category, making it the most likely to contain the detailed information described.

Question 15

Which of the following is an estimated amount?

Accepted Answer

An encumbrance is an estimated amount, often used in accounting to represent funds that have been reserved for anticipated expenses that have not yet occurred.

Question 16

If a City Manager is looking at the cash forecast,he or she is most likely concerned about which of the following issues?

Accepted Answer

The cash forecast would be concerned with the City Manager's ability to cover short-term expenses, such as payroll, through anticipated revenue and potential borrowing. Options A, B, and D refer to specific expenses and projects, which would be better suited to a capital budget or long-term financial plan.

Question 17

Which of the following factors is the most important consideration in estimating sales tax collections for the year?

Accepted Answer

The projected volume of sales subject to the sales tax is the most important consideration in estimating sales tax collections for the year, as it directly affects the amount of revenue generated from the sales tax. The other options are irrelevant and do not have a direct impact on sales tax collections.

Question 18

The City of Kent has estimated that it will spend $4,500,000 and have revenues of $4,800,000 next year.At the beginning of its new fiscal year,it will need to:

Accepted Answer

The answer of The City of Kent has estimated that...

Question 19

Which of the following is expected to occur first in the budget process?

Accepted Answer

Preparing revenue estimates is typically the first step in the budget process, as it provides a basis for determining how much money will be available for expenditures.

Question 20

The document that lists the steps of the budget process is the

Accepted Answer

The budget calendar outlines the timeline of the budget process, including deadlines for submitting budget requests, holding budget hearings, and approving the final budget. The budget request typically includes details about the specific programs and expenses to be funded, while the budget summary provides an overview of the overall budget and its major components. The budget worksheet is a tool used to help plan and track expenses, but it is not the official document that outlines the budget process.

Quiz 3: Budgetary Considerations in Governmental Accounting