State Finance Challenge Practice Test

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• Interfund transfers and reporting?
• Debt obligations backed by the full faith and credit of the U.S. government are called?
• Which type of investment is typically associated with higher risk but potential for substantial long-term growth?
• Which activity is a key part of grant closeout?
• What term describes auto insurance that pays the medical expenses of you and pedestrians injured in your vehicle?
• Which term is commonly used to denote the annual price paid for an insurance policy?
• What are the main fund balance classifications for restricted/unrestricted, and how is 'restricted' created?
• Which funding approach uses accumulated assets to pay post-employment benefits?
• Which term refers to money an individual earns or receives from work or other resources?
• Which term describes the legal responsibility for the financial costs of another person's losses or injuries?
• Which practice is essential for grant reporting and compliance?
• Which agency collects and reports credit information about consumers?
• Which term describes a type of stock that typically has priority for dividends but usually lacks voting rights?
• Which metric equals the price per share divided by earnings per share and is used to gauge stock valuation?
• What are two common revenue forecasting methods used by states?
• Interfund transfers are reported as what?
• Which legal concept imposes liability regardless of fault, including for intentional or unintentional actions?
• What is an appropriation and what happens if it lapses?
• What is a defining feature of zero-based budgeting?
• Which change did GASB 34 introduce regarding financial statements?
• Why can intergovernmental revenue be volatile and how should governments plan for it?
• Which market relates to the initial issuance of securities to the public?
• The study of how society manages its scarce resources is known as what?
• Which auto insurance coverage protects a driver and their family from injuries when the other driver is uninsured or a hit-and-run occurs?
• What concept reduces risk by replacing a single risk with many smaller unrelated risks?
• Which elements constitute effective internal control in state financial management?
• Which statement best describes emergency reserves in government finance?
• Which federal act regulates the use of credit reports and ensures consumer access to files and correction of erroneous data?
• An automatic loan made to checking account customers to cover the amount of a check written in excess of the available balance in the checking book?
• How are capital assets accounted for in fund financial statements compared with government-wide statements?
• Which law regulates the use of credit reports and provides consumers access to their files and the right to have erroneous data corrected?
• A bond trading for less than its face value is said to be priced at what?
• A situation in which a person is held responsible for intentional or unintentional actions?
• Which mutual fund has shares issued and redeemed by the fund company at investors' request?
• What is the term for transferring funds from one retirement plan to another without taxes or penalties?
• Which term best describes employer-provided benefits beyond salary, such as health insurance or retirement plans?
• Which investment fund specializes in bonds issued by state and local governments?
• Which statement describes direct grant funding?
• What is the purpose of the statistical section in a CAFR?
• What describes the purpose of procurement thresholds?
• What is a key benefit of a formal public debt issuance policy?
• Why are revenue volatility analyses important for fiscal planning?
• Why is transparency in financial reporting essential for state governments?
• What is an encumbrance and how does it affect budgetary control?
• Which retirement age is associated with full Social Security benefits for those born in 1960 or later?
• What does FDIC stand for?
• GASB 87 requires what action for most leases?
• Which option correctly lists the GASB fund balance classifications with an example for each?
• Which tax is levied on the transfer of property and life insurance at death?
• The amount of money you place in savings?
• Explain tax-increment financing (TIF) and a key fiscal concern.
• What is the role of external investment pools and prudent investor rules in state finance?
• A loan based on the current market value of a home that is less than the amount remaining on the mortgage is called a...
• Which statement best describes the primary difference between modified accrual accounting and full accrual accounting in state finance?
• In which market are new securities issued directly to shareholders for the first time?
• Which statement best describes the purpose of a pension funding policy?
• The price of a share of stock divided by the corporation's earning per share of stock will give you what?
• What are the two main purposes of an annual state budget?
• Which sequence correctly outlines the typical phases of the capital budget cycle?
• What is the purpose of the Management Discussion and Analysis (MD&A) in a CAFR?
• Which metric is commonly used to assess liquidity risk in government cash management?
• If your credit card is stolen and the thief runs up a total debt of $1000, what is the maximum amount that you can be forced to pay according to federal law if you notify the card issuer as soon as you discover it missing?
• What term describes a health condition that exists before seeking care?
• Which auto policy feature helps pay medical bills for you and your passengers after a crash, regardless of fault?
• The price-earnings ratio is a financial metric that compares which two elements?
• In the capital budget cycle, which phase immediately follows project evaluation?
• How is depreciation treated in government-wide financial statements versus fund statements?
• What term describes the maximum amount a lender has approved for borrowing that can be drawn upon as needed?
• What is the name for a low introductory rate offered on a credit card?
• Which fund balance classification is assigned based on the government's intent to spend for a specific purpose but not externally constrained?
• Compare special revenue funds and capital projects funds.
• What is the term for the initial sum of money deposited or invested, excluding interest?
• Which term refers to auto insurance coverage for injuries when the driver is uninsured or involved in a hit-and-run?
• What is the term for the decline in an asset's value as it ages?
• In government-wide statements, how are capital assets treated?
• Which statement correctly describes PAYG financing for post-employment benefits?
• Which term describes money an individual receives from earnings or other resources?
• Which term refers to benefits workers receive from their employer in addition to wages?
• How do rating agencies influence state borrowing costs?
• Which fund is used to account for operating activities in a state government?
• High yield, non-investment-grade bonds are commonly known as which type of bonds?
• Under GASB standards, where is the net pension liability reported?
• Which coverage protects against financial loss for injuries to others if you are at fault in an auto accident?
• Under modified accrual accounting, when are revenues recognized?
• Which funds typically use accrual accounting in addition to government-wide statements?
• The accumulation of money in a bank account, where the interest earned remains in the account to earn additional interest?
• What investment fund issues shares only when organized and does not continually issue new shares?
• Which term refers to a tax on earned income?
• Which statement describes how a capital budget differs from the operating budget?
• A bond that is repaid from the income generated by the project it finances is called what?
• Which statement best describes pass-through grants administered by the state on behalf of the federal government?
• What term refers to the price of a bond above its face value?
• What does CAFR stand for and what major sections does it include?
• A contract that provides income for life is known as what?
• Which item is not typically part of a pension funding policy?
• A fund whose shares are issued by an investment company only when the fund is organized?
• The price-earnings ratio is computed by dividing the stock price by what figure?
• Which statement best captures the impact of GASB 34 on state financial reporting?
• Which term denotes a tax levied on one's earnings?
• Which market involves the initial issuance of securities to investors for the first time?
• Which type of liability insurance is typically required for physicians and most medical providers?
• Failure to exercise ordinary or reasonable care in a situation is known as?
• Which term describes a bond that sells for more than its face value?
• What does GASB 84 address in fiduciary fund reporting?
• What is a rainy day fund and why is it essential in state budgeting?
• What is the tax-free transfer of funds from one retirement plan to another called?
• What term describes a loan secured by the equity in a home?
• Distinguish line-item budgeting from program budgeting.
• What term describes the ease with which an asset can be converted to cash?
• Which is NOT typically considered a component of effective internal control?
• Which market is used for initial issuance of securities directly to investors (IPO)?
• A fiscal framework typically includes which components?
• Which fund type is used for capital spending and capital projects?
• Which statement best describes a Public-Private Partnership (P3) arrangement in public infrastructure financing?
• A promise to repay a company's, or country's, debt is what kind of investment?
• What term describes a periodic change for the use of credit?
• Which term describes money an individual earns or receives from resources?
• Which savings instrument is best described as a fixed-term product that often imposes penalties for early withdrawal?
• Which type of protection do physicians typically carry to cover professional claims?
• High yield, non-investment-grade bonds are commonly referred to as which type of bonds?
• Which of the following is NOT typically a factor influencing a state's debt capacity?
• Which payment method electronically subtracts the purchase amount from the buyer's account at the moment of purchase?
• Which state law requires drivers to prove they can cover damages or injury from an auto accident?
• Name two indicators used in fiscal stress monitoring.
• Which document confirms enrollment in a group health plan and evidence of participation?
• Which facility provides access to funds up to a pre-approved limit and requires repayment with interest?
• If a person born in 1960 or later wants full Social Security benefits, at what age can they retire?
• What distinguishes a 'restricted' fund balance from an 'assigned' fund balance?
• Debt issued by a corporation to fund expansion, modernize, cover expenses, and finance other activities are called?
• Which retirement account allows tax-deferred growth where taxes are paid on withdrawals?
• Differentiate between the general fund and the capital projects fund.
• Which term refers to the decrease in value of a tangible asset as it ages?
• A check endorsement that transfers ownership to another person is called what?
• What is the purpose of the Management Discussion and Analysis (MD&A) section within the CAFR?
• What is the purpose of a debt service reserve fund in government finance?
• What is a capital budget and how does it differ from the operating budget?
• Which term refers to the amount of money a bank or other business is willing to extend to a borrower?
• If you are less concerned about short-term risk and want the possibility of generating a large, long-term return, what type of investment would you consider?
• GASB 84 fiduciary reporting changes require what?
• What ratio is used to evaluate how expensive a stock is relative to its earnings?
• The process by which unions and firms agree on the terms of employment is called?
• What is the purpose of encumbrance accounting in government funds?
• What is the term for a special retirement account in which taxes are not paid on the principal or interest until withdrawal?
• Accrual basis is used in which statements and why?
• Investment in which the investor holds legal title to the property is called what?
• Medicare is health insurance for individuals who are how old?
• Which fund balance classification requires formal action by the government's highest level to constrain spending?
• Which savings instrument would be most appropriate for building an emergency fund covering 3 to 6 months of living expenses?
• A shortfall of revenue from government spending?
• What term describes debt securities issued by a corporation to finance expansion and other activities?
• These shareholders have a greater claim to a company's assets and earnings. Their dividends must be paid out before dividends to common stockholders, and the shares typically do not have voting rights?
• What is the earliest age you can withdraw from most retirement accounts without paying a penalty?
• Structural balance is best described as which of the following?
• What term describes land and buildings that produce lease or rental income?
• What market is defined as where previously issued shares are bought and sold?
• What is a public-private partnership (P3) in capital financing? Provide an example.
• What document proves participation in a group health plan?
• Which asset category consists of land and buildings used to earn rental income?
• An excess of tax revenue over government spending is referred to as what?
• Which option best describes a bank deposit that allows withdrawals by writing checks?
• What term describes the current per-share value of a mutual fund, computed as assets minus liabilities?
• Define the debt service coverage ratio in the context of state debt management.
• Which statement best differentiates GASB 68 and GASB 75?
• What are intergovernmental revenues? Provide two examples relevant to states.
• What should a public debt issuance policy include?
• Wind damage to a roof is typically covered by which type of insurance policy?
• Which budgeting approach allocates resources by programs and desired outcomes?
• A savings plan requiring a stated amount to remain on account for a fixed period of time?
• Which description matches debt obligations issued by the U.S. government?
• Which financial arrangement allows the depositor to withdraw funds by issuing a check?
• A fiscal framework typically includes which of the following?
• Which term is defined as the per-share value of a mutual fund, derived from its assets minus its liabilities?
• Which arrangement provides a borrower access to funds up to a predefined limit that can be drawn as needed?
• What was GASB 34 and why did it transform state financial reporting?
• What is an actuarial valuation and its role in pension planning?
• Earnings on savings can be measured by which metric?
• What is the dollar amount that a lender makes available to the borrower, which may or may not be borrowed?