35) Effective capital budgeting for general capital assets of a government requires:
A) Intermediate and long-range capital improvement plans for general capital assets.
B) Nonfinancial information on physical measures and service condition of capital assets of
component units.
C) Consideration of how proprietary fund capital projects will be financed.
D) Information about the capital asset needs of a motor pool accounted for as an internal service
fund.
36) Which of the following statements regarding government budgets is not true?
A) A budget should be enacted before the fiscal year begins and be integrated with the financial
accounting system so that actual results can be compared to budgets at regular intervals.
B) The budget’s role is limited to inclusion in internal financial reports and budgetary compliance
monitoring for those funds that have a legally approved budget.
C) Integrating the budget into the accounting system allows management to oversee individual
unit performance and react quickly to variances between actual results and budgeted plans.
D) A budget is a plan of financial operation embodying an estimate of proposed expenditures for a
given period of time and the proposed means of financing them.
37) Which of the following might appropriately be termed an outcome indicator for a police
department that reports service efforts and accomplishments (SEA) indicators?
A) Number of crimes investigated.
B) Decrease in burglaries.
C) Hours of patrol.
D) Number of personnel hours expended.
38) Which of the following statements regarding service efforts and accomplishments (SEA) is not
true?
A) SEA information includes indicators of a government’s actual performance in providing
services to its citizens.
B) As governments integrate strategic planning, budgeting, and performance measurement,
information on SEA is available and often provided to the public.
C) SEA reporting may take the form of a published report, an electronic report posted on a
government’s website, or a pamphlet designed to summarize an entity’s SEA measurement results.
D) SEA reporting is required by governments with populations greater than 500,000.
39) Which of the following statements is not true?
A) A balanced scorecard is an integrated set of performance targets, both financial and
nonfinancial, that are derived from an organization‘s strategies about how to achieve its goals.
B) Total quality management (TQM) seeks to continuously improve the government’s ability to
meet or exceed demands from customers who might be external, such as taxpayers and service
recipients, or internal, such as the customers of an internal service fund.
C) Service efforts and accomplishments (SEA) reporting links customer (taxpayer and other
resource provider) satisfaction to improvements in the operating systems and processes used to
provide goods and services.
D) Customer relationship management (CRM) systems create an integrated view of a customer to
coordinate services from all channels of the organization with the intent to improve the long-term
relationship the organization has with its customer.
40) The number of lane-miles of road repaired to a specified minimum condition is an example of
an:
A) Output measure.
B) Input measure.
C) Outcome measure.
D) Efficiency measure.
41) Service efforts and accomplishments (SEA) information:
A) Includes indicators of a government’s actual performance in providing services to its citizens.
B) Aids users in assessing the economy, efficiency, and effectiveness of government.
C) Is required for all governments that issue a CAFR.
D) Both includes indicators of a government’s actual performance in providing services to its
citizens and aids users in assessing the economy, efficiency, and effectiveness of government are
true.
42) Balanced scorecards integrate all of the following into a document that can be shared with
employees and stakeholders except:
A) GASB financial reporting standards.
B) Internal business processes measures.
C) Nonfinancial measures, such as customer satisfaction.
D) Financial performance measures.
43) Which of the following has contributed most to governments’ interest in activity-based
costing?
A) GASB standards.
B) Implementation of innovative management approaches (such as TQM and SEA measures) in
response to public demand for greater accountability and productivity.
C) Increased demand for high profile management tools to bolster the image of government.
D) The enactment of Sarbanes-Oxley legislation.
15
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44) All of the following are objectives of activity-based cost (ABC) accounting in government
except:
A) To preserve, at a minimum, the present quality and availability of services.
B) To help find lower cost alternatives to providing services.
C) To link customer (taxpayer) satisfaction to improvements in the operating systems used to
provide goods and services.
D) To make increases in the volume of services dependent on reducing costs.
45) Efficiency measures, as the term is used in the service efforts and accomplishments (SEA)
literature, can be described as:
A) Measures that relate the quantity or cost of resources used to units of output.
B) Measures that relate to the amount of financial and nonfinancial resources used in a program or
process.
C) Measures that relate costs to outcomes.
D) Measures that reflect either the quantity or quality of a service provided.
46) The GASB identifies which of the following three broad categories of service efforts and
accomplishments (SEA) measures:
A) Measures of service efforts, measures of service accomplishments, and measures of efficiency.
B) Measures of service efforts and accomplishments, measures of service efficiency, and measures
of service effectiveness.
C) Measures of service efforts, measures of service accomplishments, and measures of the costs of
service efforts and accomplishments.
D) Measures of service efforts, measures of service accomplishments, and measures that relate
efforts to accomplishments.
47) Which of the following statements regarding service efforts and accomplishments (SEA) is not
true?
A) Measures of service efforts, or input measures, relate to the amount of financial and
nonfinancial resources (such as money and materials) used in a program or process.
B) Effort measures relate service efforts to outputs of service and to outcomes or results of
services.
C) Output measures are quantity measures that reflect either the quantity of a service provided or
the quantity of service provided that meets a specified quality requirement.
D) Outcome measures gauge accomplishments, or the results of services provided.
48) State and local governments and not-for-profit organizations that receive grants or contracts
from the federal government should charge costs of these grants or contracts in conformity with:
A) Cost Accounting Standards Board standards.
B) Office of Management and Budget circulars.
C) Financial Accounting Standards Board standards.
D) Governmental Accounting Standards Board standards.
49) Which of the following statements regarding costs under federal awards is not true?
A) Only items of cost specifically mentioned in a grant, contract, or other agreement document are
allowable.
B) Several costs are allowable under highly restrictive conditions and generally require the explicit
approval of the grantor agency.
C) For major not-for-profit organizations and institutions of higher learning, indirect costs must be
classified within two broad categories termed “facilities” and “administration.”
D) Direct costs are those that can be identified specifically with a particular cost objective.
50) Which of the following is not one of the criteria for an allowable cost under a federal grant?
A) A cost that is necessary and reasonable for the performance of the federal award and allocable
thereto under the OMB cost principles.
B) A cost that conforms to any limitations or exclusions set forth in the OMB cost principles or in
the federal award as to types or amount of cost items.
C) A cost that has been approved by the FASB or GASB as an allowable cost.
D) A cost that is adequately documented.