Question 1

By law, governments are prohibited from outsourcing certain activities such as clerical operations, and repair and maintenance services.

Accepted Answer

There is no universal law prohibiting governments from outsourcing certain activities. It varies depending on the country and its regulations. Some governments may have restrictions on outsourcing certain activities, while others may not have any restrictions at all.

Question 2

Which of the following is an example of an efficiency measure?

Accepted Answer

B

Question 3

Budgets are generally on a cash or near-cash basis.

Accepted Answer

Budgets are typically based on cash inflows and outflows, rather than accrual accounting methods used in financial statements. This means that the budget will focus on the actual cash available and not on the revenue or expenses that have been earned or incurred but not yet paid.

Question 4

Governmental budgets must adhere to GAAP.

Accepted Answer

Governmental budgets are not required to adhere to GAAP (Generally Accepted Accounting Principles); they often follow different standards such as GASB (Governmental Accounting Standards Board) guidelines.

Question 5

For many analytical purposes, revenues and expenditures are best expressed per capita.

Accepted Answer

Expressing revenues and expenditures per capita allows for a better comparison of economic activity across different population sizes. It provides a more accurate representation of the financial situation and economic well-being of a population.

Question 6

A government's economic condition is a broader concept than its financial position.

Accepted Answer

A government's economic condition refers to the overall health of its economy, including factors such as GDP growth, employment rates, trade balance, and inflation. Its financial position, on the other hand, refers specifically to its level of debt, revenue, and expenses. While the two concepts are related, economic condition encompasses a broader range of factors than financial position.

Question 7

A private mail and package delivery service boasts that it can deliver the same material as the government-run mail and package delivery service for a fraction of the cost of the government-run service.Which of the following is the best course of action for the government?

Accepted Answer

The answer of A private mail and package delivery service...

Question 8

The city council of the City of Highland Hills has adopted a policy of aggressively pursuing grants and other resource inflows from other levels of government.Over the past several years, the proportion of total City revenues that comes from other levels of government has been steadily increasing.As a consequent of these increased revenues, the City has begun offering a number of new services to the citizens of the City.In assessing the financial condition of the City of Highland Hills, an analyst would conclude which of the following?

Accepted Answer

Reliance on intergovernmental revenues can be risky because these funds are not guaranteed and can fluctuate based on external factors, potentially leading to financial instability.

Question 9

In the future, e-commerce will affect governments, just as it is now transforming businesses.

Accepted Answer

With the increasing popularity of e-commerce and digital transactions, governments will have to adapt and create policies and regulations that support the growth of online businesses. This includes ensuring the security and privacy of online transactions, addressing issues of taxation and cross-border trade, and promoting fair competition in the global digital marketplace. E-commerce will also affect the distribution of government services and the way citizens interact with their government, as more services become available online.

Question 10

Which of the following groups is least likely to be involved in evaluating the efficiency and effectiveness of government programs?

Accepted Answer

While legislators are responsible for creating and funding these programs, they may not always be involved in directly evaluating their effectiveness and efficiency. Accountants, economists, and statisticians are often hired to provide objective analysis and evaluations of government programs.

Question 11

A widely used rule of thumb holds that two consecutive years of operating deficits connote serious fiscal stress.

Accepted Answer

Two consecutive years of operating deficits indicate that an organization may be experiencing fiscal stress as it is spending more money than it is bringing in.

Question 12

For financial analysis purposes, nonfinancial considerations are at least as important as the financial statements.

Accepted Answer

Nonfinancial considerations such as industry trends, competitive landscape, management quality, and macroeconomic factors can significantly impact a company's financial performance and future prospects. Therefore, analyzing only financial statements without considering these nonfinancial factors can provide an incomplete picture of a company's overall health and potential.

Question 13

Accountants are actively involved in collecting and analyzing data to be used by public policy makers.Which of the following other groups might also be involved in the data collection and analysis process?

Accepted Answer

All of the listed groups (statisticians, economists, program managers) could be involved in the data collection and analysis process for public policy. Each group brings a unique set of skills and perspectives to the process.

Question 14

Which of the following is generally considered to be a positive fiscal characteristic for a City?

Accepted Answer

The answer of Which of the following is generally considered...

Question 15

For financial analysis purposes, the Comprehensive Annual Financial Report alone can provide all the information resource providers and other interested parties might need.

Accepted Answer

While the Comprehensive Annual Financial Report provides a wealth of information, it may not provide all the specific information that resource providers and other parties need. Additionally, supplementary reports or external audits may be necessary for a full and accurate financial analysis.

Question 16

Which of the following events would be evidence that the content criterion of a not-for-profit joint program and fund-raising activity had not been met? Each activity included both a program activity and a fund-raising solicitation.

Accepted Answer

The answer of Which of the following events would be...

Question 17

Which of the following would generally be considered to be an indication of future economic problems for a City?

Accepted Answer

The answer of Which of the following would generally be...

Question 18

Which of the following events would be evidence that the audience criterion of a not-for-profit joint program and fund-raising activity has NOT been met? Each activity included both a program activity and a fund-raising solicitation.

Accepted Answer

The fact that Citizens for Term Limits sent mailings only to citizens with incomes greater than $50,000 suggests that the group is targeting a specific demographic that is more likely to donate, rather than trying to educate the public on the issue. This indicates that the fund-raising solicitation was not incidental to the program activity, as it was not made available to the general public.

Question 19

Bond rating agencies usually require governments to supplement their CAFRs with additional documents, such as budgets, long-range forecasts and plans, and economic reports.

Accepted Answer

Bond rating agencies typically require governments to provide additional documents beyond just the CAFR to help them assess a government's financial health and creditworthiness. These additional documents may include budgets, long-term financial plans, economic reports, and other information that can help provide a more complete picture of the government's fiscal situation.

Question 20

Which of the following is generally considered to be a positive fiscal characteristic for a City?

Accepted Answer

An increasing percentage of discretionary expenditures is generally considered a positive fiscal characteristic for a city because it indicates that the city has more control over where it allocates its resources and can make strategic investments in areas that will benefit the community the most. This can lead to more efficient and effective use of funds.

Quiz 15: Financial Analysis

By law, governments are prohibited from outsourcing certain activities such as clerical operations, and repair and maintenance services.

Which of the following is an example of an efficiency measure?

Budgets are generally on a cash or near-cash basis.

Governmental budgets must adhere to GAAP.

For many analytical purposes, revenues and expenditures are best expressed per capita.

A government's economic condition is a broader concept than its financial position.

A private mail and package delivery service boasts that it can deliver the same material as the government-run mail and package delivery service for a fraction of the cost of the government-run service.Which of the following is the best course of action for the government?

In the future, e-commerce will affect governments, just as it is now transforming businesses.

Which of the following groups is least likely to be involved in evaluating the efficiency and effectiveness of government programs?

A widely used rule of thumb holds that two consecutive years of operating deficits connote serious fiscal stress.

For financial analysis purposes, nonfinancial considerations are at least as important as the financial statements.

Accountants are actively involved in collecting and analyzing data to be used by public policy makers.Which of the following other groups might also be involved in the data collection and analysis process?

Which of the following is generally considered to be a positive fiscal characteristic for a City?

For financial analysis purposes, the Comprehensive Annual Financial Report alone can provide all the information resource providers and other interested parties might need.

Which of the following events would be evidence that the content criterion of a not-for-profit joint program and fund-raising activity had not been met? Each activity included both a program activity and a fund-raising solicitation.

Which of the following would generally be considered to be an indication of future economic problems for a City?

Which of the following events would be evidence that the audience criterion of a not-for-profit joint program and fund-raising activity has NOT been met? Each activity included both a program activity and a fund-raising solicitation.

Bond rating agencies usually require governments to supplement their CAFRs with additional documents, such as budgets, long-range forecasts and plans, and economic reports.

Which of the following is generally considered to be a positive fiscal characteristic for a City?