CMFO - Municipal Finance Administration Final
Verified Multiple Choice and Conceptual Actual
Emended Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What is the primary function of the budgeting system in a municipality?
ANSWER: To record expenditures against legally authorized appropriations.
2. What system records money owed to the municipality by external parties such
as taxpayers and state agencies?
ANSWER: Accounts Receivable System
3. Which of the following is a key characteristic of the cash basis of accounting?
a) Revenues are recognized when earned
b) Expenditures are recognized when encumbered
c) Revenues are recognized when cash is received
d) All of the above
ANSWER: c) Revenues are recognized when cash is received
4. Which fund records proceeds from bond sales and other capital project funding
sources?
a) Trust Fund
b) General Capital Fund
c) Current Fund
,d) Special Revenue Fund
ANSWER: b) General Capital Fund
5. The Trust Fund includes which of the following types of accounts?
a) Debt service
b) Capital project appropriations
c) Payroll deductions and escrow balances
d) Real property tax revenue
ANSWER: c) Payroll deductions and escrow balances
6. Which fund is primarily used to track long-term construction or equipment
acquisition?
a) Trust Fund
b) General Capital Fund
c) Current Fund
d) State Grant Fund
ANSWER: b) General Capital Fund
7. What are typical appropriations in the Current Fund?
a) Bonds payable and long-term debt
b) Salary & Wages, O&E, Debt Service
c) Tax liens and abatements
d) Depreciation
ANSWER: b) Salary & Wages, O&E, Debt Service
8. Which fund accounts for cash transactions using the cash basis of accounting
(OCBOA)?
a) Current Fund
b) General Capital Fund
c) Trust Fund
,d) All of the above
ANSWER: d) All of the above (depending on the municipality's accounting
basis)
9. Which fund would account for the purchase of a new fire truck through bonded
debt?
ANSWER: General Capital Fund
10. Fund balance used as revenue in a municipal budget must be:
a) Non-lapsing
b) Fully appropriated
c) Free, unreserved, and certified
d) Restricted for capital use
ANSWER: c) Free, unreserved, and certified
9. The DLGS requires municipalities to follow:
a) Private accounting standards
b) GASB and OCBOA as applicable
c) Federal accounting standards
d) IRS regulations
ANSWER: b) GASB and OCBOA as applicable
10. What is typically recorded in the Operations and Expenses (O&E) section of a
municipal budget?
ANSWER: Non-salary operating costs such as supplies, contracts, and utilities
11. What fund is not required to lapse at the end of the fiscal year?
a) Current Fund
, b) Trust Fund
c) General Capital Fund
d) Both b and c
ANSWER: d) Both b and c
12. Which of the following must be included in the Annual Financial Statement
(AFS)?
a) All fund revenues and expenditures
b) Only the General Fund
c) Cash flows
d) Pension liabilities only
ANSWER: a) All fund revenues and expenditures
13. A municipality receives $200,000 in FEMA funding. Where is this recorded?
ANSWER: Grant Fund (State or Federal Grant Fund)
14. What is a common revenue for the Trust Fund?
a) Debt Service
b) Capital lease proceeds
c) Dog license fees
d) Real property taxes
ANSWER: c) Dog license fees
15. The separation of funds is primarily designed to:
a) Maximize investment returns
b) Ensure bond compliance
c) Maintain accountability and transparency
d) Reduce administrative costs
ANSWER: c) Maintain accountability and transparency
Verified Multiple Choice and Conceptual Actual
Emended Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What is the primary function of the budgeting system in a municipality?
ANSWER: To record expenditures against legally authorized appropriations.
2. What system records money owed to the municipality by external parties such
as taxpayers and state agencies?
ANSWER: Accounts Receivable System
3. Which of the following is a key characteristic of the cash basis of accounting?
a) Revenues are recognized when earned
b) Expenditures are recognized when encumbered
c) Revenues are recognized when cash is received
d) All of the above
ANSWER: c) Revenues are recognized when cash is received
4. Which fund records proceeds from bond sales and other capital project funding
sources?
a) Trust Fund
b) General Capital Fund
c) Current Fund
,d) Special Revenue Fund
ANSWER: b) General Capital Fund
5. The Trust Fund includes which of the following types of accounts?
a) Debt service
b) Capital project appropriations
c) Payroll deductions and escrow balances
d) Real property tax revenue
ANSWER: c) Payroll deductions and escrow balances
6. Which fund is primarily used to track long-term construction or equipment
acquisition?
a) Trust Fund
b) General Capital Fund
c) Current Fund
d) State Grant Fund
ANSWER: b) General Capital Fund
7. What are typical appropriations in the Current Fund?
a) Bonds payable and long-term debt
b) Salary & Wages, O&E, Debt Service
c) Tax liens and abatements
d) Depreciation
ANSWER: b) Salary & Wages, O&E, Debt Service
8. Which fund accounts for cash transactions using the cash basis of accounting
(OCBOA)?
a) Current Fund
b) General Capital Fund
c) Trust Fund
,d) All of the above
ANSWER: d) All of the above (depending on the municipality's accounting
basis)
9. Which fund would account for the purchase of a new fire truck through bonded
debt?
ANSWER: General Capital Fund
10. Fund balance used as revenue in a municipal budget must be:
a) Non-lapsing
b) Fully appropriated
c) Free, unreserved, and certified
d) Restricted for capital use
ANSWER: c) Free, unreserved, and certified
9. The DLGS requires municipalities to follow:
a) Private accounting standards
b) GASB and OCBOA as applicable
c) Federal accounting standards
d) IRS regulations
ANSWER: b) GASB and OCBOA as applicable
10. What is typically recorded in the Operations and Expenses (O&E) section of a
municipal budget?
ANSWER: Non-salary operating costs such as supplies, contracts, and utilities
11. What fund is not required to lapse at the end of the fiscal year?
a) Current Fund
, b) Trust Fund
c) General Capital Fund
d) Both b and c
ANSWER: d) Both b and c
12. Which of the following must be included in the Annual Financial Statement
(AFS)?
a) All fund revenues and expenditures
b) Only the General Fund
c) Cash flows
d) Pension liabilities only
ANSWER: a) All fund revenues and expenditures
13. A municipality receives $200,000 in FEMA funding. Where is this recorded?
ANSWER: Grant Fund (State or Federal Grant Fund)
14. What is a common revenue for the Trust Fund?
a) Debt Service
b) Capital lease proceeds
c) Dog license fees
d) Real property taxes
ANSWER: c) Dog license fees
15. The separation of funds is primarily designed to:
a) Maximize investment returns
b) Ensure bond compliance
c) Maintain accountability and transparency
d) Reduce administrative costs
ANSWER: c) Maintain accountability and transparency
