GAFRB Exam Study Guide Free Practice Test LAST UPDATED DATE Feb 04, 2026 [Q59-Q78]

Q59. A county is projecting a $7 million budget deficit in the upcoming fiscal year, so the county board, who acts as the highest level of authority for the county, sets aside $7 million in fund balance to close this gap. How should the $7 million be classified on the financial statement?

Q60. What is the maximum period of subscription-based information technology agreement (SBITA), including any options to extend, that is classified as short term?

Q61. Governmental funds reported $80 million current expenditures and $2 million capital outlays. The reconciliation of the Statement of Revenues. Expenditures, and Change in Fund Balance to the Statement of Activities starts with the total net change in fund balances in the governmental fund and

Q62. The process in the budget where OMB communicates to agencies what it will recommend to the president is called

Q63. A federal agency received utility bills before the end of the fiscal year. It is the agency’s policy to obligate funds upon receipt of the utility bills and to pay the bills immediately upon receipt. Which set of entries would be made to the budgetary accounts?

Q64. A city issues S100,000 of 10-year general obligation bonds on April 1, 2024. Debt service of $10,000 must be paid each year on March 31, with 5% interest paid on the unpaid balance. Based upon this information, the interest expense reported on the government-wide statement for fiscal year ending March 31, 2025, is

Q65. The Department of Health and Human Services prepares a financial statement displaying costs of each major program as they relate to the department’s outcomes and outputs. The title of this financial statement is the

Q66. In an ACFR. the Independent Auditor’s Report should be included in the

Q67. A private bank provides a student loan that the government has insured against default. This is an example of

Q68. For state and local governments, a fund that is legally restricted to the use of earnings with the principal protected is

Q69. Which of the following government-wide financial statements are required for state and local governments?

Q70. The quarterly inventory record below has been provided for use in preparing the organization’s financial statements. Based upon the information provided, what method of inventory valuation is used by the organization?

Q71. A basic financial statement that includes a budgetary comparison serves to

Q72. The major difference in applying the accrual concept in governmental fund accounting, as opposed to private- sector accounting, is that revenues are

Q73. An example of a federal principal financial statement is the

Q74. A state had problems with its cash reconciliation resulting in a difference between the total cash per books versus cash balance with banks. The possible loss could only be estimated within a range of $100 million to
$300 million with no amount within the range considered a better estimate than any other. The state should recognize a minimum liability of

Q75. A state grant will reimburse a city for 40% of the architectural, construction and project management costs to build an annex to a city building. A city employee, who is paid salary and benefits of 510,000 a month, works half-time on the project for six months.
The city reports the following project budgeted and actual costs:
Purpose Budget Actual
Architectural fees $ 100.000 $ 90,000
Construction costs $10,500,000 $10,000,000
Based upon the above information, what is the amount of allowable costs that the state will reimburse the city on the grant?

Q76. A federal AFR includes all of the following EXCEPT

Q77. To capitalize a research and development asset, it must

Q78. In exchange and exchange-like transactions the government