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Chapter 10

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State & Local Govt - Analysis of Financial Performance

Questão 1 de 30

1

Which of the following trends is most likely to be a signal of impending fiscal stress?

Selecione uma das seguintes:

  • An increasing ratio of own source revenues to total revenues.

  • A decreasing ratio of total revenues to total expenditures.

  • A decreasing ratio of debt service expenditures to operating revenues.

  • A decreasing ratio of operating expenditures to total revenues.

Explicação

Questão 2 de 30

1

Which of the following ratios would be most helpful in assessing the operating position of a governmental entity?

Selecione uma das seguintes:

  • Net tax-supported long-term debt/population.

  • Own source revenues/total revenues.

  • Debt service expenditures/total expenditures.

  • General fund balance/operating revenues.

Explicação

Questão 3 de 30

1

The term that is closely related to the concept of liquidity is

Selecione uma das seguintes:

  • Financial condition.

  • Interperiod equity.

  • Financial position.

  • Economic condition.

Explicação

Questão 4 de 30

1

Which of the following ratios would be considered favorable if it was low?

Selecione uma das seguintes:

  • Total revenues to population.

  • Debt service to total revenues.

  • Capital outlay from operating funds to operating expenditures.

  • Cash and short-term investments to current liabilities.

Explicação

Questão 5 de 30

1

A 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

Selecione uma das seguintes:

  • Business-type activities revenues/business-type activities expenses.

  • Unrestricted net position/total revenues.

  • Total revenues/total expenditures.

  • Total net position (governmental activities and business-type activities) less total net position at the beginning of the year.

Explicação

Questão 6 de 30

1

A 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

Selecione uma das seguintes:

  • Financial condition.

  • Fiscal capacity.

  • Economic condition.

  • Financial position.

Explicação

Questão 7 de 30

1

For which of the following is a low or decreasing value of the item associated with a stronger financial condition of a governmental entity?

Selecione uma das seguintes:

  • Unfunded pension liability.

  • Property values.

  • Home ownership.

  • Employment rate.

Explicação

Questão 8 de 30

1

A financial capability ratio that measures the degree to which the annual budget is loaded with disbursements to pay off long-term debt is:

Selecione uma das seguintes:

  • Revenue dispersion.

  • Debt service load.

  • Financing margin-bonded debt per capita.

  • Financing margin-legal debt limit.

Explicação

Questão 9 de 30

1

Which of the following is not a typical reason why people evaluate a government's financial condition?

Selecione uma das seguintes:

  • Prevent financial crises from developing.

  • Hold management accountable for the use of tax revenues.

  • Determine if the government can continue to offer the current level of services.

  • Determine whether residents will receive dividends.

Explicação

Questão 10 de 30

1

All of the following are appropriate benchmarks for a state or local government to use as a basis for comparing performance except

Selecione uma das seguintes:

  • A government's own operating results and financial position from prior years.

  • International City/County Management Association's Financial Trend Monitoring System results for governments of similar types and size.

  • Federal agencies' financial information for a comparable time period.

  • Socioeconomic and demographic trends of governments of similar types and size available from U.S. Census Bureau.

Explicação

Questão 11 de 30

1

Early warning systems to identify trends or practices that may adversely impact the long- and short-term solvency of a government are:

Selecione uma das seguintes:

  • Effective if they help decision makers assess solvency; i.e., cash solvency, budgetary solvency, long-run solvency, and service-level solvency.

  • Used by government managers as well as credit analysts, oversight bodies, and other decision makers.

  • As important today as it they were when the International City/County Management Association (ICMA) developed such a monitoring system in 1980

  • All of the statements are true.

Explicação

Questão 12 de 30

1

GASB defines the probability that a government will meet its financial and service obligations to various constituents, both currently and in the future, as:

Selecione uma das seguintes:

  • Economic condition.

  • Fiscal capacity.

  • Financial condition.

  • Financial position.

Explicação

Questão 13 de 30

1

The term used by the GASB to describe the short-term financial concept readily determined from the financial statements of governmental funds is:

Selecione uma das seguintes:

  • Economic condition.

  • Financial position.

  • Fiscal capacity.

  • Financial condition.

Explicação

Questão 14 de 30

1

The GASB has tentatively decided to use of the term economic condition as a broad concept that includes all of the following components except:

Selecione uma das seguintes:

  • Financial condition.

  • Fiscal capacity.

  • Financial position.

  • Service capacity.

Explicação

Questão 15 de 30

1

Which type of solvency indicates a government's ability to generate enough revenue over a normal period to meet its expenditures and not incur deficits?

Selecione uma das seguintes:

  • Cash solvency.

  • Budgetary solvency.

  • Long-run solvency.

  • Service-level solvency.

Explicação

Questão 16 de 30

1

The Financial Trend Monitoring System lists political culture, such as attitudes towards taxes, and the political process as examples of:

Selecione uma das seguintes:

  • Financial factors.

  • Environmental factors.

  • Organizational factors.

  • Business factors.

Explicação

Questão 17 de 30

1

Condition of the capital plant, as measured by maintenance effort and capital outlay, is an example in the Financial Trend Monitoring System of:

Selecione uma das seguintes:

  • Financial factors.

  • Environmental factors.

  • Organizational factors.

  • Management practices and legislative policies.

Explicação

Questão 18 de 30

1

Management practices and legislative policies of a government are:

Selecione uma das seguintes:

  • Critical determinants of its financial condition.

  • Difficult to measure.

  • Examples of organizational factors affecting financial condition.

  • All of the statements are correct.

Explicação

Questão 19 de 30

1

An argument for presenting a comprehensive annual financial report (CAFR) in addition to the basic financial statements is:

Selecione uma das seguintes:

  • Generally accepted accounting principles require a CAFR to be prepared by governments.

  • The 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.

  • Narrative information is always better than mere financial statements.

  • The management's discussion and analysis included in a CAFR provides useful information not available in the basic financial statements or required supplementary information.

Explicação

Questão 20 de 30

1

The use of benchmarks to aid interpretation of state and local government ratios for performance analysis can best be described as:

Selecione uma das seguintes:

  • More widespread for government-wide statements than for fund statements.

  • Comparable across states as all local government structures are the same across the country.

  • Most easily done by comparing one government to itself over time.

  • Easy since data sources useful for comparing one government to its peers are readily available.

Explicação

Questão 21 de 30

1

An advantage of government-wide financial statements required under the GASB reporting model is:

Selecione uma das seguintes:

  • Basic financial statements, such as the government-wide statements, use modified accrual accounting and focus on fiscal accountability.

  • They show the revenues and expenditures for all governmental, business-type, and fiduciary activities.

  • Fund financial statements do not use the accrual basis of accounting and as such are not useful.

  • Questions not easily addressed with disaggregated fund financial statements can be answered.

Explicação

Questão 22 de 30

1

For which of the following indicators is a low or decreasing value of the ratio associated with a stronger economic condition?

Selecione uma das seguintes:

  • The ratio of capital outlays to total operating expenditures.

  • The ratio of net revenues to total expenses.

  • The ratio of General Fund spendable fund balances to operating revenues.

  • The ratio of debt to assessed property values.

Explicação

Questão 23 de 30

1

For which of the following indicators is a trend of decreasing values for the ratio associated with a weaker economic condition?

Selecione uma das seguintes:

  • The ratio of one-time revenues to operating revenues.

  • The ratio of pension obligations to salaries and wages.

  • The ratio of revenues to debt principal and interest payments.

  • The ratio of current liabilities to operating revenue.

Explicação

Questão 24 de 30

1

Which 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)?

Selecione uma das seguintes:

  • Total ending net position (governmental activities and BTA) less total beginning net position (governmental activities and BTA).

  • Total revenue divided by total expenses.

  • Unrestricted net position divided by total revenue.

  • BTA service charge revenues divided by BTA total expenses.

Explicação

Questão 25 de 30

1

Which 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?

Selecione uma das seguintes:

  • Total revenues divided by total expenses.

  • Total debt divided by total assets.

  • Current assets divided by current liabilities.

  • Total ending net position less total beginning net position.

Explicação

Questão 26 de 30

1

Which ratio measures the government's ability to meet its current financial obligations from available cash and equivalents?

Selecione uma das seguintes:

  • Total revenue divided by total expenses.

  • Current assets divided by current liabilities.

  • Business-type activities revenue divided by business-type activity expenses.

  • Each revenue source divided by total revenue.

Explicação

Questão 27 de 30

1

A 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?

Selecione uma das seguintes:

  • Debt service coverage.

  • Liquidity.

  • Financing margin.

  • Self-sufficiency.

Explicação

Questão 28 de 30

1

Which of the following is a true statement about information used by decision makers in evaluating governments' financial performance?

Selecione uma das seguintes:

  • Internal managers do not have access to as much information as do credit analysts.

  • Internal managers have an informational advantage over credit analysts with respect to their own governments.

  • Internal managers have an informational advantage over bond rating agency analysts with respect to benchmark information.

  • None of the statements are true.

Explicação

Questão 29 de 30

1

A composite reading of the financial health of a government can be useful for:

Selecione uma das seguintes:

  • Assisting decision makers to compare the government's financial health over time.

  • Assisting government managers to compare its financial health to other governments.

  • Credit analysts who are comparing a government's financial health to one another.

  • All of the statements are ways that a composite reading can be useful.

Explicação

Questão 30 de 30

1

A General Fund operating deficit as a percentage of operating revenues and transfers:

Selecione uma das seguintes:

  • Will be negative indicating that the budget will be out of balance.

  • May be positive.

  • May not indicate a problem if the total of spendable fund balances is adequate to cover the difference.

  • None of the above.

Explicação

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