CGFM Exam 1 (2025) Actual Exam
Questions and Answers A+ Graded
AGA .- .CORRECT .ANSWER .-Association .of .Government .Accountants
CEAR .- .CORRECT .ANSWER .-Certificate .of .Excellence .in .Accountability
.Reporting
CFO .- .CORRECT .ANSWER .-Chief .Financial .Officer
CGFM .- .CORRECT .ANSWER .-Certified .Government .Financial .Manager
ERP .- .CORRECT .ANSWER .-Enterprise .Resource .Planning
FASAB .- .CORRECT .ANSWER .-Federal .Accounting .Standards .Advisory .Board
FASB .- .CORRECT .ANSWER .-Financial .Accounting .Standards .Board
FSIO .- .CORRECT .ANSWER .-Financial .Systems .Integration .Office .(within .GSA)
GAAP .- .CORRECT .ANSWER .-Generally .Accepted .Accounting .Principles
GAO .- .CORRECT .ANSWER .-Government .Accountibility .Office
GASB .- .CORRECT .ANSWER .-Government .Accounting .Standards .Board
GPRA .- .CORRECT .ANSWER .-Government .Performance .and .Results .Act
OMB .- .CORRECT .ANSWER .-Office .of .Management .and .Budget
PAR .- .CORRECT .ANSWER .-Performance .and .Accountability .Report
SEA .- .CORRECT .ANSWER .-Service .Efforts .and .Accomplishments
Accountability .- .CORRECT .ANSWER .-Principle .that .in .a .democracy,
.government .operates .at .the .consent .of .the .people. .Therefore .it .must .answer .to
.the .people .for .its .actions .and .results, .including .the .taking .and .using .of .the
.people's .resources.
Allotments .- .CORRECT .ANSWER .-In .the .federal .government, .an .agency's
.distribution .of .apportioned .budgetary .authority .to .various .components .within
,.the .agency. .After .the .executive .agency .receives .its .apportionment, .it .allots
.budgetary .authority .to .specific .components .within .the .agency.
Anti-Deficiency .Act .- .CORRECT .ANSWER .-At .the .federal .level, .a .law .stating
.that .officials .can .be .fined .and/or .jailed .if .they .obligate .the .government .to
.spend .funds .beyond .the .legally .authorized .purpose, .time, .or .amount.
Apportionmnets .- .CORRECT .ANSWER .-Definitions .may .vary .at .different .levels
.of .government. .At .the .federal .level, .OMB's .approval .to .use .a .protion .of .the
.legislatively .approved .budgetary .authority.
Appropriated .Budget .- .CORRECT .ANSWER .-Budget .that .has .been .passed .by
.the .legistlative .branch; .has .effect .of .law.
Appropriation .- .CORRECT .ANSWER .-A .legistlative .enactment .(law, .statute .or
.ordinance) .that .creates .spending .authority; .the .legal .authority .to .incur
.expenses .and .spend .money.
Attestation .engagements .- .CORRECT .ANSWER .-Engagement .primarily
.concerned .with .examining .or .performing .agreed .upon .procedures .on .a .subject
.matter, .or .an .assertion .about .a .subject .matter, .and .reporting .on .the .results.
.The .subject .matter .may .be .financial .or .nonfinancial .and .can .be .part .of .a
.financial .audit .or .performance .audit. .Possible .subjects .include .reporting .on .an
.entity's .internal .controls, .compliance .with .law .or .performance .measures.
Authorization .- .CORRECT .ANSWER .-Legislative .enactment .that .approves
.programs; .prescribes .what .activities .an .agency .may .pursue .if .funding .is
.available.
Block .grants .- .CORRECT .ANSWER .-Intergovernmental .provision .of .resources
.for .broadly .defined .purposes. .Contrasts .with .category .grants.
Capital .Budget .- .CORRECT .ANSWER .-Forecasts .and .controls .spending .for ."big
.ticket" .items .that .are .acquired .and .used .over .a .period .of .several .years, .such
.as .construction .projects .and .major .equipment .purchases. .Used .at .state .and
.local .levels.
Capital .lease .- .CORRECT .ANSWER .-Capital .leases .is .a .lease .fo .real .property
.that .meets .defined .criteria .requiring .the .government .to .report .the .property .as .it
.purchased .long .term .debt
Cash-flow .budget .- .CORRECT .ANSWER .-Forecasts .the .timing .as .well .as
.amount .of .cash .flows .for .the .year. .Used .to .project .required .cash .levels.
Category .grants .- .CORRECT .ANSWER .-Intergovernmental .provision .of
.resources .to .be .used .for .activities .in .a .specific .category .of .purpose. .May .be
.further .classified .as .discretionary .grants .or .formula .grants. .Contrasts .with
.block .grants.
,Central .Management .Agencies .- .CORRECT .ANSWER .-Government .agencies
.that .provide .central .management .services .to .other .components. .Example
.would .be .a .state .government .hr .office .(that .serves .all .state .agencies) .or .the
.OMB .at .the .federal .level.
CEAR .- .CORRECT .ANSWER .-An .AGA .program .that .helps .federal .agencies .and
.their .components .to .produce .effective, .high-quality .Performance .and
.Accountability .Reports
Certificate .of .Participation .- .CORRECT .ANSWER .-Form .of .shared .government
.financing. .In .a .typical .form, .several .financial .institutions .share .in .a .loan
.arrangement .with .a .government .entity.
Charter .- .CORRECT .ANSWER .-Local .government .version .of .a .constitution.
.States .may .provide .for .the .establishment .of .local .governments .through
.charters
checks .and .balances .- .CORRECT .ANSWER .-Process .by .which .one .branch .of
.government .(legislative, .executiv .or .judicial) .can .constrain .actions .of .the .other
.branches. .Flows .from .separation .of .powers.
CFO .Act .- .CORRECT .ANSWER .-1990 .law .that, .among .other .provisions, .requires
.the .federal .government's .major .executive .branch .agencies .to .have .a .CFO.
.Prescribes .duties .and .reporting .requirements, .and .requires .audited .financial
.statements
Commissions .- .CORRECT .ANSWER .-Government .components .established .by
.law, .statuted .or .ordinance. .May .be .permanent .or .temporary. .Because .they .are
.established .by .law, .may .have .greater .autonomy .and .authority .than .government
.components .that .are .administratively .established. .Ex. .Federal .Communication
.Commision
Components .- .CORRECT .ANSWER .-Organized .units .of .government .such .as
.agencies, .offices .and .departments. .Found .in .all .branches .of .government .at .all
.levels.
Conflict .of .interest .- .CORRECT .ANSWER .-Arises .when .one .has .personal
.interest .in .matters .relating .to .official .duties .or .activities. .Such .conflicts .can
.destroy .objectivity .and .independence .and .prevent .the .exercise .of .due .care
Consumption .Taxes .- .CORRECT .ANSWER .-Broad .category .of .tax .that .includes
.sales, .use, .excise .and .value-added .taxes
Continuity .of .Operations .- .CORRECT .ANSWER .-Refers .to .the .efforts .to .ensure
.the .organization .can .sustain .essential .operations .regardless .of .planned .or
.unplanned .incidents .or .disruptions.
Covenant .(bond) .- .CORRECT .ANSWER .-Legal .requirements .pertaining .to .a
.specific .bond .issue. .Typically .define .the .maturity .date, .revenue .stream .that .will
, .be .used .to .repay .the .debt, .interest .rate .and .repayment .schedule. .May .require .a
.sinking .fund .and .may .specify .conditions .that .must .be .met .before .new .debt .can
.be .issued.
Credit-rating .agencies .- .CORRECT .ANSWER .-Independent .organizations .that
.assess .the .credit .worthiness .of .debt. .Three .major .rating .agenciew .are .Standard
.& .Poors, .Moody's .Investor .Service .and .Fitches .rating
Data .mining .- .CORRECT .ANSWER .-Using .special, .computer-based .techniques
.such .as .filters .and .algorithms .to .extract .meaningful .information .from .large
.bodies .of .data
Debt .- .CORRECT .ANSWER .-Money .owed .by .the .entity .to .individual .or
.organizational .creditors, .ususally .as .a .result .of .planned .short- .or .long-term
.borrowing .to .finance .government .objectives
Dedicated .tax .- .CORRECT .ANSWER .-Taxes .levied .to .finance .a .specific .activity.
.Proceeds .are .deposited .into .an .account .restricted .to .that .activity. .Also .referred
.to .as .earmarked .or .restricted .taxes.
Deficit .- .CORRECT .ANSWER .-Occurs .when .government .expenditures .for .a
.specific .fiscal .period .exceed .revenues .and/or .financial .resource .inflows.
Diligence .- .CORRECT .ANSWER .-Pursuing .an .event, .action .or .assignment .to .a
.timely .and .sufficient .end .or .close
Discrestionary .grants .- .CORRECT .ANSWER .-Form .of .category .grant. .Transfers
.funds .between .governments .for .a .specific .purpose; .whether .a .grant .is .awarded
.and .the .amount .of .the .award .depend .on .discretion .of .the .entity .providing .the
.funds
Donations .- .CORRECT .ANSWER .-Voluntary .contributions .that .confer .no .rights
.or .benefits .on .the .giver
Due .care .- .CORRECT .ANSWER .-To .discharge .professional .responsibilities .with
.competence .and .diligence, .to .the .best .of .one's .ability, .and .with .the .same .level
.of .ability .and .skill .as .others .in .similar .positions. .It .also .means .to .act .in .the
.best .interest .of .those .served.
Earmarking .- .CORRECT .ANSWER .-Variation .on .use .of .special .funds. .Revenue
.from .specific .taxes .or .other .sources .is .set .aside .for .specific .activities. .One
.example .is .the .earmarking .of .gasoline .taxes .for .highway .improvements
Enterprise .Resoure .Planning .System .- .CORRECT .ANSWER .-Major ."end-to-end"
.computer .system .that .links .many .functions .and .departments. .Used .to .simplify
.and .streamline .financial .management, .and .to .integrate .operation .with .financial
.management
Questions and Answers A+ Graded
AGA .- .CORRECT .ANSWER .-Association .of .Government .Accountants
CEAR .- .CORRECT .ANSWER .-Certificate .of .Excellence .in .Accountability
.Reporting
CFO .- .CORRECT .ANSWER .-Chief .Financial .Officer
CGFM .- .CORRECT .ANSWER .-Certified .Government .Financial .Manager
ERP .- .CORRECT .ANSWER .-Enterprise .Resource .Planning
FASAB .- .CORRECT .ANSWER .-Federal .Accounting .Standards .Advisory .Board
FASB .- .CORRECT .ANSWER .-Financial .Accounting .Standards .Board
FSIO .- .CORRECT .ANSWER .-Financial .Systems .Integration .Office .(within .GSA)
GAAP .- .CORRECT .ANSWER .-Generally .Accepted .Accounting .Principles
GAO .- .CORRECT .ANSWER .-Government .Accountibility .Office
GASB .- .CORRECT .ANSWER .-Government .Accounting .Standards .Board
GPRA .- .CORRECT .ANSWER .-Government .Performance .and .Results .Act
OMB .- .CORRECT .ANSWER .-Office .of .Management .and .Budget
PAR .- .CORRECT .ANSWER .-Performance .and .Accountability .Report
SEA .- .CORRECT .ANSWER .-Service .Efforts .and .Accomplishments
Accountability .- .CORRECT .ANSWER .-Principle .that .in .a .democracy,
.government .operates .at .the .consent .of .the .people. .Therefore .it .must .answer .to
.the .people .for .its .actions .and .results, .including .the .taking .and .using .of .the
.people's .resources.
Allotments .- .CORRECT .ANSWER .-In .the .federal .government, .an .agency's
.distribution .of .apportioned .budgetary .authority .to .various .components .within
,.the .agency. .After .the .executive .agency .receives .its .apportionment, .it .allots
.budgetary .authority .to .specific .components .within .the .agency.
Anti-Deficiency .Act .- .CORRECT .ANSWER .-At .the .federal .level, .a .law .stating
.that .officials .can .be .fined .and/or .jailed .if .they .obligate .the .government .to
.spend .funds .beyond .the .legally .authorized .purpose, .time, .or .amount.
Apportionmnets .- .CORRECT .ANSWER .-Definitions .may .vary .at .different .levels
.of .government. .At .the .federal .level, .OMB's .approval .to .use .a .protion .of .the
.legislatively .approved .budgetary .authority.
Appropriated .Budget .- .CORRECT .ANSWER .-Budget .that .has .been .passed .by
.the .legistlative .branch; .has .effect .of .law.
Appropriation .- .CORRECT .ANSWER .-A .legistlative .enactment .(law, .statute .or
.ordinance) .that .creates .spending .authority; .the .legal .authority .to .incur
.expenses .and .spend .money.
Attestation .engagements .- .CORRECT .ANSWER .-Engagement .primarily
.concerned .with .examining .or .performing .agreed .upon .procedures .on .a .subject
.matter, .or .an .assertion .about .a .subject .matter, .and .reporting .on .the .results.
.The .subject .matter .may .be .financial .or .nonfinancial .and .can .be .part .of .a
.financial .audit .or .performance .audit. .Possible .subjects .include .reporting .on .an
.entity's .internal .controls, .compliance .with .law .or .performance .measures.
Authorization .- .CORRECT .ANSWER .-Legislative .enactment .that .approves
.programs; .prescribes .what .activities .an .agency .may .pursue .if .funding .is
.available.
Block .grants .- .CORRECT .ANSWER .-Intergovernmental .provision .of .resources
.for .broadly .defined .purposes. .Contrasts .with .category .grants.
Capital .Budget .- .CORRECT .ANSWER .-Forecasts .and .controls .spending .for ."big
.ticket" .items .that .are .acquired .and .used .over .a .period .of .several .years, .such
.as .construction .projects .and .major .equipment .purchases. .Used .at .state .and
.local .levels.
Capital .lease .- .CORRECT .ANSWER .-Capital .leases .is .a .lease .fo .real .property
.that .meets .defined .criteria .requiring .the .government .to .report .the .property .as .it
.purchased .long .term .debt
Cash-flow .budget .- .CORRECT .ANSWER .-Forecasts .the .timing .as .well .as
.amount .of .cash .flows .for .the .year. .Used .to .project .required .cash .levels.
Category .grants .- .CORRECT .ANSWER .-Intergovernmental .provision .of
.resources .to .be .used .for .activities .in .a .specific .category .of .purpose. .May .be
.further .classified .as .discretionary .grants .or .formula .grants. .Contrasts .with
.block .grants.
,Central .Management .Agencies .- .CORRECT .ANSWER .-Government .agencies
.that .provide .central .management .services .to .other .components. .Example
.would .be .a .state .government .hr .office .(that .serves .all .state .agencies) .or .the
.OMB .at .the .federal .level.
CEAR .- .CORRECT .ANSWER .-An .AGA .program .that .helps .federal .agencies .and
.their .components .to .produce .effective, .high-quality .Performance .and
.Accountability .Reports
Certificate .of .Participation .- .CORRECT .ANSWER .-Form .of .shared .government
.financing. .In .a .typical .form, .several .financial .institutions .share .in .a .loan
.arrangement .with .a .government .entity.
Charter .- .CORRECT .ANSWER .-Local .government .version .of .a .constitution.
.States .may .provide .for .the .establishment .of .local .governments .through
.charters
checks .and .balances .- .CORRECT .ANSWER .-Process .by .which .one .branch .of
.government .(legislative, .executiv .or .judicial) .can .constrain .actions .of .the .other
.branches. .Flows .from .separation .of .powers.
CFO .Act .- .CORRECT .ANSWER .-1990 .law .that, .among .other .provisions, .requires
.the .federal .government's .major .executive .branch .agencies .to .have .a .CFO.
.Prescribes .duties .and .reporting .requirements, .and .requires .audited .financial
.statements
Commissions .- .CORRECT .ANSWER .-Government .components .established .by
.law, .statuted .or .ordinance. .May .be .permanent .or .temporary. .Because .they .are
.established .by .law, .may .have .greater .autonomy .and .authority .than .government
.components .that .are .administratively .established. .Ex. .Federal .Communication
.Commision
Components .- .CORRECT .ANSWER .-Organized .units .of .government .such .as
.agencies, .offices .and .departments. .Found .in .all .branches .of .government .at .all
.levels.
Conflict .of .interest .- .CORRECT .ANSWER .-Arises .when .one .has .personal
.interest .in .matters .relating .to .official .duties .or .activities. .Such .conflicts .can
.destroy .objectivity .and .independence .and .prevent .the .exercise .of .due .care
Consumption .Taxes .- .CORRECT .ANSWER .-Broad .category .of .tax .that .includes
.sales, .use, .excise .and .value-added .taxes
Continuity .of .Operations .- .CORRECT .ANSWER .-Refers .to .the .efforts .to .ensure
.the .organization .can .sustain .essential .operations .regardless .of .planned .or
.unplanned .incidents .or .disruptions.
Covenant .(bond) .- .CORRECT .ANSWER .-Legal .requirements .pertaining .to .a
.specific .bond .issue. .Typically .define .the .maturity .date, .revenue .stream .that .will
, .be .used .to .repay .the .debt, .interest .rate .and .repayment .schedule. .May .require .a
.sinking .fund .and .may .specify .conditions .that .must .be .met .before .new .debt .can
.be .issued.
Credit-rating .agencies .- .CORRECT .ANSWER .-Independent .organizations .that
.assess .the .credit .worthiness .of .debt. .Three .major .rating .agenciew .are .Standard
.& .Poors, .Moody's .Investor .Service .and .Fitches .rating
Data .mining .- .CORRECT .ANSWER .-Using .special, .computer-based .techniques
.such .as .filters .and .algorithms .to .extract .meaningful .information .from .large
.bodies .of .data
Debt .- .CORRECT .ANSWER .-Money .owed .by .the .entity .to .individual .or
.organizational .creditors, .ususally .as .a .result .of .planned .short- .or .long-term
.borrowing .to .finance .government .objectives
Dedicated .tax .- .CORRECT .ANSWER .-Taxes .levied .to .finance .a .specific .activity.
.Proceeds .are .deposited .into .an .account .restricted .to .that .activity. .Also .referred
.to .as .earmarked .or .restricted .taxes.
Deficit .- .CORRECT .ANSWER .-Occurs .when .government .expenditures .for .a
.specific .fiscal .period .exceed .revenues .and/or .financial .resource .inflows.
Diligence .- .CORRECT .ANSWER .-Pursuing .an .event, .action .or .assignment .to .a
.timely .and .sufficient .end .or .close
Discrestionary .grants .- .CORRECT .ANSWER .-Form .of .category .grant. .Transfers
.funds .between .governments .for .a .specific .purpose; .whether .a .grant .is .awarded
.and .the .amount .of .the .award .depend .on .discretion .of .the .entity .providing .the
.funds
Donations .- .CORRECT .ANSWER .-Voluntary .contributions .that .confer .no .rights
.or .benefits .on .the .giver
Due .care .- .CORRECT .ANSWER .-To .discharge .professional .responsibilities .with
.competence .and .diligence, .to .the .best .of .one's .ability, .and .with .the .same .level
.of .ability .and .skill .as .others .in .similar .positions. .It .also .means .to .act .in .the
.best .interest .of .those .served.
Earmarking .- .CORRECT .ANSWER .-Variation .on .use .of .special .funds. .Revenue
.from .specific .taxes .or .other .sources .is .set .aside .for .specific .activities. .One
.example .is .the .earmarking .of .gasoline .taxes .for .highway .improvements
Enterprise .Resoure .Planning .System .- .CORRECT .ANSWER .-Major ."end-to-end"
.computer .system .that .links .many .functions .and .departments. .Used .to .simplify
.and .streamline .financial .management, .and .to .integrate .operation .with .financial
.management
