AGA GAFRB Exam Questions Instant Access - No Installation Required

Question 1

What is the term used to describe categories that present obligations by the items or services purchased by the federal government?

Atreasury fund accounts

Bobject classes

Cprograms

Dgeneral ledger accounts
Comprehensive Detailed
Object classes categorize federal government obligations by the type of goods or services purchased, such as personnel compensation, equipment, travel, etc. These are standardized in OMB Circular A-11, Section 83.
This classification supports budgeting, analysis, and reporting.
Relevant Reference:
OMB Circular A-11, Section 83 -- Object Classification
USSGL (U.S. Standard General Ledger) Glossary
GAO Glossary of Budget Terms
Answer : B. object classes

Answer : B

Question 2

State and local governments account for budgeted and actual expenditures to ensure that

Acash is available to pay bills when they come due.

BGASB standards are met when producing the basic financial statements.

Cactual expenditures are used to formulate next year's budget.

Dspending conforms to legal requirements.
State and local governments adopt legally binding budgets and are required to monitor compliance with those budgets. Budget-to-actual comparisons help ensure that public funds are spent only as authorized by the legislative body. This supports the core accountability principle of public sector financial reporting.
While budgets can also support planning and cash flow, the primary purpose of tracking budgeted vs. actual expenditures is legal compliance.
Relevant Reference:
GASB Statement No. 34 -- Budgetary Comparison Schedules
GFOA -- Budget Monitoring and Compliance
GAO Red Book -- Legal Requirements for Public Spending
Answer : D. spending conforms to legal requirements.

Answer : D

Question 3

An example of a non-exchange revenue is

Asales taxes.

Bbond proceeds.

Clicensing fees.

Dinvestment earnings.

Answer : A

Non-exchange revenues are those in which a government gives or receives value without directly receiving or giving equal value in return. Sales taxes are a classic example of a non-exchange revenue because the payer (consumer) does not receive a direct, measurable benefit from the government in exchange for the tax paid.

Other examples of non-exchange revenues include property taxes, grants, and fines. In contrast, licensing fees and investment earnings are exchange or exchange-like revenues, since they involve a mutual benefit or earnings return.

Relevant Standards and Reference:

GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions

GASB Codification Section N50

GFOA Revenue Classification Guidelines

Question 4

Which of the following events requires both a proprietary and a budgetary accounting entry?

AA contracting officer signs a contract to buy printers.

BA contracting officer's representative receives delivery of previously ordered printers.

CA funds certifying official commits resources to order printers.

DA budget officer allots resources to a program office to buy printers.
This is the point when a proprietary entry and a budgetary entry must both be recorded:
Proprietary entry: To record the asset (e.g., equipment) and recognize the payable
Budgetary entry: To move from unpaid obligation (Undelivered Orders) to paid obligation (Delivered Orders)
Receiving goods/services triggers both the accrual of the expense and the update of the obligation's status in the budgetary accounts.
Relevant Reference:
FASAB SFFAS No. 1 -- Accounting for Selected Assets and Liabilities
Treasury Financial Manual, Part 2, Ch. 4700 -- Proprietary vs. Budgetary Accounting
GAO Red Book -- Appropriations Law
Answer : B. A contracting officer's representative receives delivery of previously ordered
printers.

Answer : B

Question 5

The unobligated balance of an appropriation is equal to the total unexpended appropriation, less the total amounts

Aobligated.

Ballotted.

Ccollected.

Dapportioned.

Answer : A

The unobligated balance of an appropriation refers to the portion of the total appropriation authority that has not yet been committed (obligated) through contracts, purchase orders, or other legally binding agreements.

Formula:

Unobligated Balance = Total Appropriation -- Total Obligations

This is a key control metric in federal and state financial management, used to determine how much funding remains legally available for future obligations.

Relevant Standards and Reference:

OMB Circular A-11, Section 20.3

GAO Principles of Federal Appropriations Law (Red Book)

FASAB SFFAS No. 7: Reporting on Budgetary Resources

Therefore, Option A is correct.

Question 6

Government, public, private and not-for-profit entities all share which common goal of financial reporting?

Aprovide users with decision support

Bprovide users with the current status of the entity

Cinform users about the ability of the entity to generate revenue

Ddemonstrate the nature of cash receipts and disbursements
Despite differences in sector goals, all entities---public, private, nonprofit, or government---use financial reporting to provide information that assists stakeholders in making informed decisions.
While private-sector entities focus on profitability and governmental entities focus on accountability and stewardship, both require decision-useful financial data.
Relevant Reference:
FASAB SFFAC No. 1 -- Objectives of Federal Financial Reporting
GASB Concepts Statement No. 1 -- Objectives of Financial Reporting
FASB Statement of Financial Accounting Concepts No. 1
Answer : A. provide users with decision support

Answer : A

Question 7

Separate fund financial statements should be presented for

Anet assets and activities.

Bgovernmental and proprietary funds.

Clong-term debt.

Dcapital assets.
Separate fund financial statements are required for:
Governmental Funds (e.g., general fund, special revenue)
Proprietary Funds (e.g., enterprise, internal service funds)
Fiduciary Funds (reported separately but not combined with government-wide statements)
Long-term debt and capital assets are components within the financial statements---not fund types.
Relevant Reference:
GASB Statement No. 34 -- Financial Reporting Model
GASB Codification Section 2200 -- Financial Reporting
GFOA Fund Reporting Framework
Answer : B. governmental and proprietary funds

Answer : B

AGA Examination 2: Governmental Accounting, Financial Reporting and Budgeting GAFRB Exam Questions