{CMFO} Municipal Finance Organization and
Budgeting Verified Multiple Choice and
Conceptual Actual Emended Exam Questions
With Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What are uniform budget forms? - ANSWER Forms issued annually by
the DLGS that prescribe the format for annual appropriations and accounts.
2. What is the importance of determining the full and fair value of real
property by the Municipal Tax Assessor? - ANSWER It ensures that
property is assessed fairly for tax purposes.
3. What type of items can be recorded in the General Capital Fund? -
ANSWER Bondable items related to general capital improvements and
facility acquisitions.
4. What is an example of a specific receipt that might be recorded in a Trust
Fund? - ANSWER Dog license revenues.
5. What does the term 'anticipated revenues' refer to in the context of the
Current Fund? - ANSWER Revenues expected to be received during the
current fiscal year.
,6. What happens to the Rider upon approval? - ANSWER It is annexed to
the operating budget of the current and subsequent years, having an
indefinite life until rescinded.
7. What is required to set up a non-lapsing revolving fund? - ANSWER A
separate Trust Fund must be established with cash on hand for
expenditures, and there must be statutory or regulatory law authorizing the
purpose.
8. What do Utility Operating and Capital Funds account for? - ANSWER
They account for the operation and acquisition of capital facilities of
municipally owned utilities, such as water, sewer, and swimming pool
utilities.
9. How is income derived for utility funds? - ANSWER Income is derived
from user fees based on consumption or other reliable measurements of
utility use.
10.What accounting basis do utility funds utilize? - ANSWER Utility funds
utilize accrual accounting, where interfund receivables are not offset by a
reserve for receivables.
11.What is the general basis for recording current fund revenues? - ANSWER
Current fund revenues are recorded on a cash basis in the year the cash
is received.
,12.What must every fund contain according to the chart of accounts? -
ANSWER Every fund must contain an identification of all accounts
classified according to assets, liabilities, reserves, and fund balance.
13.What is the purpose of the Flexible Chart of Accounts (FCOA)? - ANSWER
The FCOA provides a standardized method of budget reporting and
facilitates electronic filing of budgets and financial statements for
municipalities.
14.How is a thirteen-digit account code structured in the FCOA? - ANSWER
The code identifies the fund, general ledger/trial balance account,
appropriation/NJCAFR category, subsidiary accounts, and detail line items.
15.What is the accounting equation in municipal finance? - ANSWER The
difference between assets and liabilities, including the reserve for
receivables, is referred to as fund balance or surplus.
16.What is recorded in the general fixed asset account group? - ANSWER
The value of fixed assets at original cost, including land, buildings, vehicular
equipment, and general equipment owned by the municipality.
17.What is the threshold cost for fixed assets to be recorded in the account
group? - ANSWER Fixed assets with a cost in excess of five thousand
dollars ($5,000) individually must be recorded.
, 18.What must municipalities do regarding fixed assets? - ANSWER
Municipalities are required to perform an inventory to account for fixed
assets and record changes such as sales or acquisitions.
19.What types of utilities can be established by municipalities? - ANSWER
Utilities can include water, sewer, swimming pool utilities, and potentially
others.
20.What is the role of the DLGS in relation to the chart of accounts? - ANSWER
The DLGS promulgated a Flexible Chart of Accounts to standardize
budget reporting.
21.What is the significance of the fund balance in municipal accounting? -
ANSWER Fund balance represents the surplus and is the difference
between total assets and total liabilities.
22.What is the purpose of recording fixed assets? - ANSWER To account
for the municipality's investment in fixed assets.
23.What must be done with changes in fixed assets? - ANSWER Changes
such as sales of equipment or acquisition of property must be recorded.
24.What is the relationship between budget appropriations and expenditures
in utility funds? - ANSWER Expenditures are recorded against budget
appropriations.
Budgeting Verified Multiple Choice and
Conceptual Actual Emended Exam Questions
With Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What are uniform budget forms? - ANSWER Forms issued annually by
the DLGS that prescribe the format for annual appropriations and accounts.
2. What is the importance of determining the full and fair value of real
property by the Municipal Tax Assessor? - ANSWER It ensures that
property is assessed fairly for tax purposes.
3. What type of items can be recorded in the General Capital Fund? -
ANSWER Bondable items related to general capital improvements and
facility acquisitions.
4. What is an example of a specific receipt that might be recorded in a Trust
Fund? - ANSWER Dog license revenues.
5. What does the term 'anticipated revenues' refer to in the context of the
Current Fund? - ANSWER Revenues expected to be received during the
current fiscal year.
,6. What happens to the Rider upon approval? - ANSWER It is annexed to
the operating budget of the current and subsequent years, having an
indefinite life until rescinded.
7. What is required to set up a non-lapsing revolving fund? - ANSWER A
separate Trust Fund must be established with cash on hand for
expenditures, and there must be statutory or regulatory law authorizing the
purpose.
8. What do Utility Operating and Capital Funds account for? - ANSWER
They account for the operation and acquisition of capital facilities of
municipally owned utilities, such as water, sewer, and swimming pool
utilities.
9. How is income derived for utility funds? - ANSWER Income is derived
from user fees based on consumption or other reliable measurements of
utility use.
10.What accounting basis do utility funds utilize? - ANSWER Utility funds
utilize accrual accounting, where interfund receivables are not offset by a
reserve for receivables.
11.What is the general basis for recording current fund revenues? - ANSWER
Current fund revenues are recorded on a cash basis in the year the cash
is received.
,12.What must every fund contain according to the chart of accounts? -
ANSWER Every fund must contain an identification of all accounts
classified according to assets, liabilities, reserves, and fund balance.
13.What is the purpose of the Flexible Chart of Accounts (FCOA)? - ANSWER
The FCOA provides a standardized method of budget reporting and
facilitates electronic filing of budgets and financial statements for
municipalities.
14.How is a thirteen-digit account code structured in the FCOA? - ANSWER
The code identifies the fund, general ledger/trial balance account,
appropriation/NJCAFR category, subsidiary accounts, and detail line items.
15.What is the accounting equation in municipal finance? - ANSWER The
difference between assets and liabilities, including the reserve for
receivables, is referred to as fund balance or surplus.
16.What is recorded in the general fixed asset account group? - ANSWER
The value of fixed assets at original cost, including land, buildings, vehicular
equipment, and general equipment owned by the municipality.
17.What is the threshold cost for fixed assets to be recorded in the account
group? - ANSWER Fixed assets with a cost in excess of five thousand
dollars ($5,000) individually must be recorded.
, 18.What must municipalities do regarding fixed assets? - ANSWER
Municipalities are required to perform an inventory to account for fixed
assets and record changes such as sales or acquisitions.
19.What types of utilities can be established by municipalities? - ANSWER
Utilities can include water, sewer, swimming pool utilities, and potentially
others.
20.What is the role of the DLGS in relation to the chart of accounts? - ANSWER
The DLGS promulgated a Flexible Chart of Accounts to standardize
budget reporting.
21.What is the significance of the fund balance in municipal accounting? -
ANSWER Fund balance represents the surplus and is the difference
between total assets and total liabilities.
22.What is the purpose of recording fixed assets? - ANSWER To account
for the municipality's investment in fixed assets.
23.What must be done with changes in fixed assets? - ANSWER Changes
such as sales of equipment or acquisition of property must be recorded.
24.What is the relationship between budget appropriations and expenditures
in utility funds? - ANSWER Expenditures are recorded against budget
appropriations.
