Quiz
State & Local Govt - Analysis of Financial Performance
Fragen in diesem Quiz (30)
1Which of the following trends is most likely to be a signal of impending fiscal stress?
- AAn increasing ratio of own source revenues to total revenues.
- BA decreasing ratio of total revenues to total expenditures.
- CA decreasing ratio of debt service expenditures to operating revenues.
- DA decreasing ratio of operating expenditures to total revenues.
2Which of the following ratios would be most helpful in assessing the operating position of a governmental entity?
- ANet tax-supported long-term debt/population.
- BOwn source revenues/total revenues.
- CDebt service expenditures/total expenditures.
- DGeneral fund balance/operating revenues.
3The term that is closely related to the concept of liquidity is
- AFinancial condition.
- BInterperiod equity.
- CFinancial position.
- DEconomic condition.
4Which of the following ratios would be considered favorable if it was low?
- ATotal revenues to population.
- BDebt service to total revenues.
- CCapital outlay from operating funds to operating expenditures.
- DCash and short-term investments to current liabilities.
5A measure of whether the government lived within its means in the measurement year, or was required to use prior year resources to fund a portion of current year costs, or shifted the funding of some current year costs to future periods, is
- ABusiness-type activities revenues/business-type activities expenses.
- BUnrestricted net position/total revenues.
- C Total revenues/total expenditures.
- DTotal net position (governmental activities and business-type activities) less total net position at the beginning of the year.
6A term that describes a government's ongoing ability and willingness to raise revenues, incur debt, and meet its financial obligations as they become due is
- AFinancial condition.
- BFiscal capacity.
- CEconomic condition.
- DFinancial position.
7For which of the following is a low or decreasing value of the item associated with a stronger financial condition of a governmental entity?
- AUnfunded pension liability.
- BProperty values.
- CHome ownership.
- DEmployment rate.
8A financial capability ratio that measures the degree to which the annual budget is loaded with disbursements to pay off long-term debt is:
- ARevenue dispersion.
- BDebt service load.
- CFinancing margin-bonded debt per capita.
- DFinancing margin-legal debt limit.
9Which of the following is not a typical reason why people evaluate a government's financial condition?
- APrevent financial crises from developing.
- BHold management accountable for the use of tax revenues.
- CDetermine if the government can continue to offer the current level of services.
- DDetermine whether residents will receive dividends.
10All of the following are appropriate benchmarks for a state or local government to use as a basis for comparing performance except
- AA government's own operating results and financial position from prior years.
- BInternational City/County Management Association's Financial Trend Monitoring System results for governments of similar types and size.
- CFederal agencies' financial information for a comparable time period.
- DSocioeconomic and demographic trends of governments of similar types and size available from U.S. Census Bureau.
11Early warning systems to identify trends or practices that may adversely impact the long- and short-term solvency of a government are:
- AEffective if they help decision makers assess solvency; i.e., cash solvency, budgetary solvency, long-run solvency, and service-level solvency.
- BUsed by government managers as well as credit analysts, oversight bodies, and other decision makers.
- CAs important today as it they were when the International City/County Management Association (ICMA) developed such a monitoring system in 1980
- DAll of the statements are true.
12GASB defines the probability that a government will meet its financial and service obligations to various constituents, both currently and in the future, as:
- AEconomic condition.
- BFiscal capacity.
- CFinancial condition.
- DFinancial position.
13The term used by the GASB to describe the short-term financial concept readily determined from the financial statements of governmental funds is:
- AEconomic condition.
- BFinancial position.
- CFiscal capacity.
- DFinancial condition.
14The GASB has tentatively decided to use of the term economic condition as a broad concept that includes all of the following components except:
- AFinancial condition.
- BFiscal capacity.
- CFinancial position.
- DService capacity.
15Which type of solvency indicates a government's ability to generate enough revenue over a normal period to meet its expenditures and not incur deficits?
- ACash solvency.
- BBudgetary solvency.
- CLong-run solvency.
- DService-level solvency.
16The Financial Trend Monitoring System lists political culture, such as attitudes towards taxes, and the political process as examples of:
- AFinancial factors.
- BEnvironmental factors.
- COrganizational factors.
- DBusiness factors.
17Condition of the capital plant, as measured by maintenance effort and capital outlay, is an example in the Financial Trend Monitoring System of:
- AFinancial factors.
- BEnvironmental factors.
- COrganizational factors.
- DManagement practices and legislative policies.
18Management practices and legislative policies of a government are:
- ACritical determinants of its financial condition.
- BDifficult to measure.
- CExamples of organizational factors affecting financial condition.
- DAll of the statements are correct.
19An argument for presenting a comprehensive annual financial report (CAFR) in addition to the basic financial statements is:
- AGenerally accepted accounting principles require a CAFR to be prepared by governments.
- BThe complex nature of financial condition and lack of a "bottom-line" performance measure for governments makes all three sections of the CAFR useful for decision makers.
- CNarrative information is always better than mere financial statements.
- DThe management's discussion and analysis included in a CAFR provides useful information not available in the basic financial statements or required supplementary information.
20The use of benchmarks to aid interpretation of state and local government ratios for performance analysis can best be described as:
- AMore widespread for government-wide statements than for fund statements.
- BComparable across states as all local government structures are the same across the country.
- CMost easily done by comparing one government to itself over time.
- DEasy since data sources useful for comparing one government to its peers are readily available.
21An advantage of government-wide financial statements required under the GASB reporting model is:
- ABasic financial statements, such as the government-wide statements, use modified accrual accounting and focus on fiscal accountability.
- BThey show the revenues and expenditures for all governmental, business-type, and fiduciary activities.
- CFund financial statements do not use the accrual basis of accounting and as such are not useful.
- DQuestions not easily addressed with disaggregated fund financial statements can be answered.
22For which of the following indicators is a low or decreasing value of the ratio associated with a stronger economic condition?
- AThe ratio of capital outlays to total operating expenditures.
- BThe ratio of net revenues to total expenses.
- CThe ratio of General Fund spendable fund balances to operating revenues.
- DThe ratio of debt to assessed property values.
23For which of the following indicators is a trend of decreasing values for the ratio associated with a weaker economic condition?
- AThe ratio of one-time revenues to operating revenues.
- BThe ratio of pension obligations to salaries and wages.
- CThe ratio of revenues to debt principal and interest payments.
- DThe ratio of current liabilities to operating revenue.
24Which of the following items describes a measure of the change from the prior period in total net position of the government as a whole for governmental and business-type activities (BTA)?
- ATotal ending net position (governmental activities and BTA) less total beginning net position (governmental activities and BTA).
- BTotal revenue divided by total expenses.
- CUnrestricted net position divided by total revenue.
- DBTA service charge revenues divided by BTA total expenses.
25Which ratio measures the degree to which the government's total assets have been funded with debt, indicating the extent of true ownership of government assets?
- ATotal revenues divided by total expenses.
- BTotal debt divided by total assets.
- CCurrent assets divided by current liabilities.
- DTotal ending net position less total beginning net position.
26Which ratio measures the government's ability to meet its current financial obligations from available cash and equivalents?
- ATotal revenue divided by total expenses.
- BCurrent assets divided by current liabilities.
- CBusiness-type activities revenue divided by business-type activity expenses.
- DEach revenue source divided by total revenue.
27A citizen watch group is concerned that the bond investors and lenders might try to take over and run the city. Which performance measure best addresses whether the government can pay its bond investors and lenders on time so the group's concerns are groundless?
- ADebt service coverage.
- BLiquidity.
- CFinancing margin.
- DSelf-sufficiency.
28Which of the following is a true statement about information used by decision makers in evaluating governments' financial performance?
- AInternal managers do not have access to as much information as do credit analysts.
- BInternal managers have an informational advantage over credit analysts with respect to their own governments.
- CInternal managers have an informational advantage over bond rating agency analysts with respect to benchmark information.
- DNone of the statements are true.
29A composite reading of the financial health of a government can be useful for:
- AAssisting decision makers to compare the government's financial health over time.
- BAssisting government managers to compare its financial health to other governments.
- CCredit analysts who are comparing a government's financial health to one another.
- DAll of the statements are ways that a composite reading can be useful.
30A General Fund operating deficit as a percentage of operating revenues and transfers:
- AWill be negative indicating that the budget will be out of balance.
- BMay be positive.
- CMay not indicate a problem if the total of spendable fund balances is adequate to cover the difference.
- DNone of the above.
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- Beschreibung
- Chapter 10
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- turquoise_cat
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- English
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- Erstellt am 28 Mär 2014 · aktualisiert am 8 Jan 2017
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