(2025) PASS CGFM Exam Free Practice Test with 100% Accurate Answers
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AGA CGFM (Certified Government Financial Manager) Certification Exam is a rigorous and comprehensive test that is designed to assess the competency and knowledge of professionals who work in the field of government financial management. Certified Government Financial Manager (CGFM) certification is recognized by organizations and agencies at the federal, state, and local levels, and is a requirement for many positions in government financial management.
AGA CGFM Exam Syllabus Topics:
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NEW QUESTION # 68
In 2005 the police department had four lost workday cases and 27 days were lost. The department has 53 full-time employees. The frequency and severity rates will be
- A. 7.9 and 50.9
- B. 8.0 and 51.0
- C. 7.5 and 50.9
- D. 7.5 and 51.9
Answer: C
NEW QUESTION # 69
Under the arrangement, governments completely outsource the
reconciliation to the bank, which reports items issued and paid, issued but not paid, and not yet issued.
- A. Full reconciliation
- B. Partial reconciliation
- C. None of these
- D. Reverse positive pay
Answer: A
NEW QUESTION # 70
An ISF has the following capital equipment in service for the stated time. Based upon the information below, using the straight-line method, what should be charged for depreciation at year-end?
- A. $2,171
- B. $4,267
- C. $6,438
- D. $8,155
Answer: C
NEW QUESTION # 71
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. No significant difference
- B. None of these
- C. Purchase
- D. Lease
Answer: D
NEW QUESTION # 72 
This exhibit shows that management should give thoughts to its coding system. A coding system structure with too many accounts is redundant but a too-abbreviated system does not sufficiently permit cost performance evaluation. Minimally organizations should budget by:
- A. department
- B. Funds, Department and Object expenditure
- C. Object of experiment
- D. Funds
Answer: B
NEW QUESTION # 73
The city of Mudville uses 1600 oil filters annually. The cost of placing an order is $5.00. The unit cost is $3.50.
The carrying cost is 20 percent, and the carrying cost per unit is &0.70(0.20x$3.50). And, there are 255 working days per year, and each order requires three working days of lead time. What is the reorder point?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: C
NEW QUESTION # 74
A government borrows $20,000 for one year at a 10 percent interest rate. What will be the non-discounted loan?
- A. 11%
- B. None of these
- C. 10%
- D. 12%
Answer: C
NEW QUESTION # 75
The first step in assessing an agency's internal control program's compliance with applicable laws and regulations is to
- A. request a compliance review from the agency's chief legal officer.
- B. develop an inventory of the applicable laws and regulations.
- C. contact the legislature to secure its views on any areas of regulatory noncompliance.
- D. review legal actions against the agency for noncompliance with laws and regulations.
Answer: B
Explanation:
* First Step in Assessing Compliance:
* The first step in evaluating compliance is to develop acomprehensive inventoryof all applicable laws and regulations that the agency must follow.
* This ensures the assessment process is thorough and based on a clear understanding of the regulatory environment.
* Explanation of Answer Choices:
* A. Review legal actions against the agency for noncompliance with laws and regulations:
Important, but this comes later as part of identifying past compliance issues.
* B. Contact the legislature to secure its views on any areas of regulatory noncompliance:
Unnecessary for the initial step of compliance assessment.
* C. Develop an inventory of the applicable laws and regulations: Correct. This is the foundational step to ensure all relevant requirements are included in the assessment.
* D. Request a compliance review from the agency's chief legal officer: Incorrect. While legal advice may be helpful, it is not the starting point for compliance assessment.
References:
* GAO,Standards for Internal Control in the Federal Government (Green Book).
* OMB Circular A-123,Management's Responsibility for Internal Control.
NEW QUESTION # 76
Which of the following best suites this Question mark?
- A. Statement of Expenditures
- B. Statement of cash flows
- C. Interim statement
- D. None of these
Answer: B
NEW QUESTION # 77
The U.S. Standard General Ledger will be used to record financial events for federal agencies, and common data elements shall be used throughout a federal agency for collection, storage and retrieval of financial information records according to OMB circular number:
- A. A-87.
- B. A-127.
- C. A-122.
- D. A-133.
Answer: B
NEW QUESTION # 78
Gas, taxes restricted for road maintenance and repair, property taxes restricted for downtown development, property taxes restricted for fire tax districts and state tobacco settlement funds restricted for smoking reduction and economic development are settled by Government with the help of:
- A. Major Federal Government Funds
- B. Financial sector Funds
- C. Special revenue funds
- D. None of these
Answer: C
Explanation:
Explanation
NEW QUESTION # 79
aims to beat the average market rate of
In contrast to ,
return.
- A. Passive investment management active investing
- B. Cash horizon, match disbursements
- C. Active investment, match disbursements
- D. Active investing, passive investment management
Answer: A
NEW QUESTION # 80
Compliance reporting, under government auditing standards, identifies all of the following components EXCEPT
- A. the auditor's responsibility for tests of compliance.
- B. areas of noncompliance.
- C. the scopeof the compliance testing.
- D. review of major internal control cycles.
Answer: D
Explanation:
* Compliance Reporting Under Government Auditing Standards (GAS):
* GAS requires auditors to assess compliance with applicable laws, regulations, contracts, and grant agreements during audits.
* Compliance reporting typically includes:
* Identifying areas of noncompliance.
* Describing the auditor's responsibility for compliance testing.
* Outlining the scope of compliance testing.
* Explanation of Answer Choices:
* A. Areas of noncompliance: Included in compliance reporting to highlight where the entity failed to meet requirements.
* B. The auditor's responsibility for tests of compliance: GAS requires auditors to clarify their role in compliance testing.
* C. Review of major internal control cycles: Correct. While internal controls may be assessed, reviewing "major internal control cycles" is not a direct component of compliance reporting.
* D. The scope of the compliance testing: GAS mandates that the scope of testing be disclosed in the compliance report.
References:
* GAO,Government Auditing Standards (Yellow Book).
* AICPA,Compliance Reporting Guidance for Government Audits.
NEW QUESTION # 81
Banks offer following short-term, loans, EXCEPT:
- A. None of these
- B. Bond anticipation notes (BANs) in anticipation of future long-term financing
- C. A line of credit against which a specified dollar amount may be drawn with interest paid, usually monthly
- D. Tax anticipation notes (TANs) or revenue anticipation of taxes or other revenue that will be received
Answer: A
NEW QUESTION # 82
All of the following represent selection criteria used to make contract awards EXCEPT contractor
- A. financial position.
- B. past performance records.
- C. union affiliations.
- D. staff expertise.
Answer: C
Explanation:
* Selection Criteria for Contract Awards:
* When awarding contracts, federal, state, and local governments typically evaluate contractors based on objective criteria like staff expertise, past performance, and financial position to ensure the contractor can successfully fulfill the contract requirements.
* Union affiliationis irrelevant to the contractor's ability to meet the contractual obligations and is not a valid selection criterion.
* Explanation of Answer Choices:
* A. Staff expertise: Correctly used to ensure the contractor has qualified personnel.
* B. Past performance records: Correctly used to evaluate the contractor's historical success in fulfilling similar contracts.
* C. Union affiliations: Correct. This is not considered a valid selection criterion for contract awards.
* D. Financial position: Correctly used to assess the contractor's financial stability.
References:
* Federal Acquisition Regulation (FAR) Part 15,Contracting by Negotiation.
* Office of Management and Budget (OMB) Circular A-102,Grant and Contract Management Requirements.
NEW QUESTION # 83
Federal Government requires accounting records on:
- A. Both A&B
- B. GGAP-basis
- C. Non-GAAP basis
- D. It depends
Answer: D
NEW QUESTION # 84
Management shoulg consider the cost of internal controls in relationship to
- A. benefits provided.
- B. risk of collusion.
- C. the available budget.
- D. inherent risks.
Answer: A
Explanation:
Why Should Management Consider the Cost of Internal Controls in Relation to Benefits?
* Thecost-benefit principlestates that the cost of implementing and maintaining internal controls should not exceed the benefits derived from those controls. Effective internal controls help mitigate risks, improve efficiency, and ensure compliance, but their implementation comes with costs (e.g., time, resources, systems).
* Management must evaluate whether the benefits of preventing or detecting potential issues (e.g., fraud, errors) justify the associated costs.
Why Other Options Are Incorrect:
* A. The available budget:While the budget is important, internal controls are not solely dictated by budget constraints; their effectiveness and benefit-to-cost ratio are key considerations.
* B. Inherent risks:While inherent risks are a factor in determining control needs, the relationship between cost and benefit remains the primary consideration.
* D. Risk of collusion:Controls address collusion risks, but management does not prioritize collusion specifically when assessing cost versus benefit.
References and Documents:
* COSO Internal Control Framework:Highlights the cost-benefit principle when implementing controls.
* GAO Standards for Internal Control (Green Book):Emphasizes balancing costs with benefits when designing internal control systems.
NEW QUESTION # 85
Which of the following is not included in long-term credit products offered by banks?
- A. Bonds agreements
- B. A line of credit
- C. Long-term capital lease agreements
- D. None of these
Answer: B
NEW QUESTION # 86
Centralization is most cost effective than decentralization purchasing because:
- A. Purchases are better scheduled
- B. Goods are more systematically inspected
- C. Suppliers operate under a single set of rules and expectations
- D. All of these
Answer: D
NEW QUESTION # 87
Local governments sometimes provide water and sewer service to customers outside their than those living inside the jurisdiction. These customers are typically charged government because of extra cost of extending service to them.
- A. Same
- B. It depends
- C. More
- D. Less
Answer: C
NEW QUESTION # 88
Funds accounts for all unrestricted contributions, gifts and other income that can be used for any purpose are known as?
- A. All of there
- B. Current restricted funds
- C. General funds
- D. Current funds
Answer: A
NEW QUESTION # 89
The noteworthy and most important thing in active investment by governments is:
- A. Cash forecast
- B. Portfolio management
- C. None of these
- D. Sector Allocation
Answer: A
NEW QUESTION # 90
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The Certified Government Financial Manager (CGFM) certification is open to anyone who has a four-year degree from an accredited university and has appropriate work experience. The program is also open to individuals who do not have a four-year degree but have enough years of experience working in the financial management of government agencies.
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