CERTIFIED GOVERNMENT FINANCIAL MANAGER (CGFM) PRACTICE TORRENT - CGFM ACTUAL TEST & CGFM FREE DEMO

Certified Government Financial Manager (CGFM) Practice Torrent - CGFM Actual Test & CGFM Free Demo

Certified Government Financial Manager (CGFM) Practice Torrent - CGFM Actual Test & CGFM Free Demo

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Tags: New CGFM Test Forum, 100% CGFM Exam Coverage, Pdf CGFM Pass Leader, Latest CGFM Exam Test, CGFM Test Topics Pdf

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AGA CGFM Exam is designed to test a candidate's knowledge of government financial management, including topics such as budgeting, accounting, auditing, financial reporting, and internal controls. CGFM exam is divided into three parts: Governmental Environment, Governmental Accounting, Financial Reporting and Budgeting, and Governmental Financial Management and Control.

The CGFM exam consists of three included modules: Government Environment, Governmental Accounting, and Financial Reporting, and Governmental Financial Management and Control. Each of these modules tests different skills required for working in government financial management. Each module has a different weighting and includes roughly 20-25% of the exam content.

The CGFM Certification program is open to individuals who are currently working or have worked in the government financial management sector. Certified Government Financial Manager (CGFM) certification program requires candidates to pass three exams covering government financial management, government accounting, and financial reporting and analysis.

AGA Certified Government Financial Manager (CGFM) Sample Questions (Q75-Q80):

NEW QUESTION # 75
The ratios used to determine an organization's ability to meet its creditor's demands are

  • A. debt burden ratios.
  • B. liquidity ratios.
  • C. turnover ratios.
  • D. budgetary cushion ratios.

Answer: B

Explanation:
What Are Liquidity Ratios?Liquidity ratios are financial metrics used to measure an organization's ability to meet its short-term financial obligations as they come due. These ratios assess whether the organization has sufficient liquid assets (like cash, receivables, or short-term investments) to cover its current liabilities (debts or obligations due within a year).
Why Are They Relevant to Creditors?Creditors care deeply about an entity's ability to repay its debts in a timely manner. Liquidity ratios provide a snapshot of the organization's financial health and give insight into its capacity to meet short-term demands. They are essential tools in evaluating whether a government entity (federal, state, or local) or any other organization can pay its creditors without needing to secure additional financing or liquidate long-term assets.
Common Liquidity Ratios:The most commonly used liquidity ratios are:
* Current Ratio:This measures the organization's ability to pay off its current liabilities with current assets.Formula:Current Assets ÷ Current Liabilities
* Quick Ratio (Acid-Test Ratio):A stricter version of the current ratio, it excludes less liquid assets (like inventory) to assess the organization's immediate ability to pay short-term debts.Formula:(Current Assets - Inventory) ÷ Current Liabilities
* Cash Ratio:Focuses only on the most liquid assets, such as cash and cash equivalents.Formula:Cash + Cash Equivalents ÷ Current Liabilities How Do Liquidity Ratios Apply to Governmental Accounting?In governmental accounting, liquidity ratios are crucial for determining whether a governmental entity has the financial flexibility to manage short- term obligations like accounts payable, payroll, and other operating costs. For example:
* State and local governments use liquidity ratios to show stakeholders their ability to sustain operations without financial strain.
* Government-wide financial statements (under GASB standards) often emphasize liquidity to demonstrate fiscal health to bondholders and credit rating agencies.
Why Not Other Ratios?
* A. Budgetary Cushion Ratios:These focus on the organization's ability to withstand revenue shortfalls and maintain budgetary reserves, not specifically on meeting creditor demands.
* C. Debt Burden Ratios:These measure the overall burden of debt on the organization but don't directly address short-term liquidity or solvency.
* D. Turnover Ratios:These evaluate operational efficiency (e.g., how quickly assets like inventory are converted into revenue), which doesn't directly relate to creditor demands.
References and Documents:
* Government Financial Manager (GFM) Competency Framework by the Association of Government Accountants (AGA):Section on "Financial Analysis" emphasizes the importance of liquidity ratios in assessing short-term solvency for government entities.
* GASB Concepts Statement No. 1:Discusses the need for governmental financial reporting to provide information on financial condition, including short-term liquidity.
* AGA Performance Management Framework Guide (2023):Highlights liquidity ratios as critical tools for demonstrating fiscal responsibility and transparency in public sector financial management.


NEW QUESTION # 76
A local government can either purchase a computer for $61,000 or lease it for five years at $15000, after which the local government would own it. The anticipated discount rate will be 8%. Is it more economical to lease or purchase?

  • A. Purchase
  • B. No significant difference
  • C. None of these
  • D. Lease

Answer: D


NEW QUESTION # 77
Governments should also set service response goals. For example:

  • A. To process 100% of all citizen claims within 96 hours of receipt
  • B. To close 75% of claims investigated within 60 days
  • C. All of these
  • D. To review and process at least 95% of workers' compensation claims within five days

Answer: C


NEW QUESTION # 78
Under government fuditing standards, auditors performing financial statement audits must

  • A. design tests to assess compliance with laws, regulations, contracts and grant agreements.
  • B. design tests to detect fraud, waste and abuse.
  • C. identify expenditures that exceed the related obligations.
  • D. identify violations of laws which could be punishable by monetary penalties.

Answer: A

Explanation:
* Government Auditing Standards (GAS):
* GAS, often referred to as theYellow Book, outlines the responsibilities of auditors conducting financial statement audits for government entities.
* One core requirement is that auditors must consider compliance with applicable laws, regulations, contracts, and grant agreements that could materially affect financial statements.
* Explanation of Answer Choices:
* A. Design tests to assess compliance with laws, regulations, contracts, and grant agreements: Correct. This is a required component under GAS to ensure financial statements are materially accurate and comply with legal and regulatory frameworks.
* B. Identify violations of laws which could be punishable by monetary penalties: Incorrect.
Auditors are not required to investigate or pursue penalties but to focus on material misstatements or risks.
* C. Identify expenditures that exceed the related obligations: Incorrect. While this could indicate an issue, auditors are not required to specifically test for this unless it relates to material misstatements or compliance issues.
* D. Design tests to detect fraud, waste, and abuse: Incorrect. Auditors are not specifically required to detect fraud, waste, and abuse, though they should be alert to indicators.
References:
* Government Accountability Office (GAO),Government Auditing Standards (Yellow Book).
* Uniform Guidance (2 CFR Part 200),Audit Requirements for Federal Programs.


NEW QUESTION # 79
Details the principal steps and the dates by which the bonds will be
sold.

  • A. None of these
  • B. Bond sale calendar
  • C. Bond certificate
  • D. Bond indenture

Answer: B


NEW QUESTION # 80
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