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Free CGFM Practice Questions

10 free, exam-style Certified Government Financial Manager (CGFM) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CGFM practice test to study every exam domain.

Question 1

A city operates a municipal water system that charges customers monthly fees. This activity should be reported in:

  1. An Enterprise Fund
  2. The General Fund
  3. A Special Revenue Fund
  4. An Internal Service Fund
Show answer & explanation

Correct answer: A - An Enterprise Fund

Question 2

Governmental funds use which combination of measurement focus and basis of accounting?

  1. Economic resources / accrual
  2. Current financial resources / modified accrual
  3. Economic resources / modified accrual
  4. Cash basis / cash measurement focus
Show answer & explanation

Correct answer: B - Current financial resources / modified accrual

Question 3

Block grants differ from categorical grants primarily in that block grants:

  1. Have more detailed federal requirements and less recipient flexibility
  2. Are available only to the federal government
  3. Provide broader purpose funding with greater state and local flexibility in use
  4. Must be repaid to the federal government within five years
Show answer & explanation

Correct answer: C - Provide broader purpose funding with greater state and local flexibility in use

Question 4

A performance audit finds that a job training program costs $15,000 per participant but places only 20% of graduates in jobs. This finding relates MOST directly to which level of accountability?

  1. Policy accountability
  2. Process accountability
  3. Program accountability
  4. Probity/legality accountability
Show answer & explanation

Correct answer: C - Program accountability

Question 5

A city council passes a resolution designating $500,000 for future park improvements. This amount is classified as:

  1. Restricted
  2. Assigned
  3. Committed
  4. Nonspendable
Show answer & explanation

Correct answer: C - Committed

Question 6

The correct sequence of the federal budgetary process is:

  1. Obligation → Appropriation → Allotment → Apportionment → Commitment → Outlay
  2. Appropriation → Apportionment → Allotment → Commitment → Obligation → Outlay
  3. Apportionment → Appropriation → Commitment → Allotment → Outlay → Obligation
  4. Allotment → Apportionment → Appropriation → Obligation → Commitment → Outlay
Show answer & explanation

Correct answer: B - Appropriation → Apportionment → Allotment → Commitment → Obligation → Outlay

Question 7

A project has PV = $200,000, EV = $180,000, and AC = $210,000. The Cost Variance is:

  1. +$20,000 (under budget)
  2. -$10,000 (over budget)
  3. -$30,000 (over budget)
  4. +$30,000 (under budget)
Show answer & explanation

Correct answer: C - -$30,000 (over budget)

Question 8

The key difference in how a capital asset purchase is recorded between governmental fund statements and government-wide statements is:

  1. Governmental funds record it as an expenditure; government-wide statements capitalize it as an asset
  2. Governmental funds capitalize it as an asset; government-wide statements record it as an expenditure
  3. Both record it as an expenditure but governmental funds also show accumulated depreciation
  4. Both capitalize it as an asset but governmental funds use modified accrual basis for timing
Show answer & explanation

Correct answer: A - Governmental funds record it as an expenditure; government-wide statements capitalize it as an asset

Question 9

Requiring two signatures on checks over $10,000 is an example of which COSO component?

  1. Control Environment
  2. Risk Assessment Activities
  3. Monitoring Activities
  4. Control Activities
Show answer & explanation

Correct answer: D - Control Activities

Question 10

The Single Audit Act applies to non-federal entities that expend federal awards totaling at least:

  1. $250,000 in a fiscal year
  2. $500,000 in a fiscal year
  3. $1,000,000 in a fiscal year
  4. $750,000 in a fiscal year
Show answer & explanation

Correct answer: D - $750,000 in a fiscal year

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