Exam 12: Budgeting and Performance Measurement

Line-item budgeting has remained a popular tool due to its simplicity and the accountability it allows.

State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with

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.

Effective capital budgeting for general capital assets of a government requires

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.

Name at least three criteria that must be met for costs to be allowable under OMB circulars.

GASB Concepts Statement No.2 requires state and local governments to include service efforts and accomplishments measures within the comprehensive annual financial report.

A government must select and maintain one budgeting approach across all departments and programs.

Some of the budgeting approaches governments have experimented with as alternatives to line-item,incremental budgeting include performance budgeting,program budgeting,the planning-programming-budgeting system,and zero-based budgeting.

In budgeting for the inflow of financial resources,government officials must concern themselves with revenues and other financing sources.

Why should persons who manage,advise,or audit governments and not-for-profit organizations be generally familiar with OMB Circulars A-87,A-21,and A-122? In your answer explain what "OMB" means,and why its circulars should be of concern to those involved with management,advisement,or auditing of state and local governments and not-for-profit organizations.

A major disadvantage of activity-based costing in a governmental setting is the very limited number of activities for which it can be used.

What is the name of the type of budgeting in which the very existence of each activity should be justified each year? Elaborate.

The following are key terms in Chapter 12 that relate to costing of government services: A.Allowable costs B.Job order costing C.Common rule D.Cost objective E.Indirect costs F.Direct costs G.Process costing H.Activity-based costing For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

What is the role of cost drivers in an activity-based cost (ABC)system? Explain how analysis of cost drivers can be useful in identifying inefficient activities and the cause(s)of the inefficiency?

If the revenues budget of a government is prepared on the modified accrual basis is there any reason why the revenues budget should be converted to a cash receipts budget? Explain.

The number of lane-miles of road repaired to a specified minimum condition is an example of an

Balanced scorecards integrate all of the following into a document that can be shared with employees and stakeholders except

What advantages does total quality management (TQM)offer a government? Is it fundamentally a budget approach?

The concepts of total quality management (TQM)are consistent with earlier budget approaches such as performance budgeting and PPBS.