GNP – Ch. 12

All of the following are objectives of activity-based cost (ABC) accounting in government except:

a. To preserve, at a minimum, the present quality and availability of services.

b. To help find lower cost alternatives to providing services.

c. To link customer (taxpayer) satisfaction to improvements in the operating systems used to provide goods and services.

d. To make increases in the volume of services dependent on reducing costs.

The GASB identifies which of the following three broad categories of service efforts and accomplishments (SEA) measures:

a. Measures of service efforts, measures of service accomplishments, and measures of efficiency.

b. Measures of service efforts and accomplishments, measures of service efficiency, and measures of service effectiveness.

c. Measures of service efforts, measures of service accomplishments, and measures of the costs of service efforts and accomplishments.

d. Measures of service efforts, measures of service accomplishments, and measures that relate efforts to accomplishments.

Which of the following might appropriately be termed an outcome indicator for a police department that reports service efforts and accomplishments (SEA) indicators?

a. Number of crimes investigated.
b. Value of property lost due to crime.
c. Hours of patrol.
d. Number of personnel hours expended.

Efficiency measures, as the term is used in the service efforts and accomplishments (SEA) literature, can be described as:

a. Measures that relate the quantity or cost of resources used to units of output.
b. Measures that relate to the amount of financial and nonfinancial resources used in a program or process.
c. Measures that relate costs to outcomes.
d. Measures that reflect either the quantity or quality of a service provided.

(True or False) GASB Concepts Statement No. 2 requires state and local governments to include service efforts and accomplishments measures within the comprehensive annual financial report.
(True or False) Total quality management (TQM) seeks to continuously improve an organization’s ability to meet or exceed customers’ demands, and, as such, is useful in a government setting as well as a business setting.
(True or False) Budgeting is an important part of a manager’s planning and control responsibilities in both public and private organizations.
(True or False) Despite its initial popularity, service efforts and accomplishments reporting has lost favor in recent years.
(True or False) A major advantage of activity-based costing (ABC) is that it reduces unit cost distortions arising from overhead allocations that often occur using traditional cost accounting systems.
(True or False) The type of budgeting that relates input of resources to output of services is zero-based budgeting.
(True or False) Service efforts and accomplishments (SEA) reporting helps citizens, elected officials, appointed officials, investors and creditors, and other interested parties evaluate the government’s performance in the absence of a “bottom line” measure such as exists for for-profit entities.
Cash disbursement budgets:

a. Are prepared to facilitate the preparation of government-wide financial statements.

b. Are usually prepared for each month of the year, or for shorter intervals, in order to facilitate planning short-term borrowings and investments.

c. Are prepared only for funds not required to operate under legal appropriation budgets.

d. Are prepared only for each fiscal year because disbursements for each month are approximately equal.

An budgeting method that derives the subsequent year’s budget from the current year’s budget is called:

a. Planning-programming-budgeting.
b. Incremental budgeting.
c. Zero-based budgeting.
d. Performance budgeting.

A common approach to budgeting line-items whereby the current year’s budget is constructed by adding or subtracting amounts expected to be required by line items is:

a. Performance budgeting.
b. Zero-based budgeting.
c. Program budgeting.
d. Incremental budgeting.

(True or False) Public hearings must be held to provide adequate opportunity for citizens’ input to governmental budgets, prior to legislative adoption of the budget.
Which of the following statements regarding government budgets is not true?

a. A budget should be enacted before the fiscal year begins and be integrated with the financial accounting system so that actual results can be compared to budgets at regular intervals.

b. The budget’s role is limited to inclusion in internal financial reports and budgetary compliance monitoring for those funds that have a legally approved budget.

c. Integrating the budget into the accounting system allows management to oversee individual unit performance and react quickly to variances between actual results and budgeted plans.

d. A budget is a plan of financial operation embodying an estimate of proposed expenditures for a given period of time and the proposed means of financing them.

(True or False) To determine which costs are allowable for charging to a federal assistance program, accountants and auditors refer to the GASB cost circular.
(True or False) Under service efforts and accomplishments (SEA) reporting input measures are quantity measures that reflect the quantity of a service provided, such as the number of lane-miles of road repaired.
(True or False) In governments, the budget has always played a role in external financial reports through the required budget-to-actual comparison schedules or statements for those funds that have a legally approved budget.
(True or False) Service efforts and accomplishments measures suffer from the same problem as line-item or object-of-expenditures budgeting; that is, focusing only on resource inputs while ignoring outputs and outcomes of governmental activities.

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