Chapter 13: Financial Management

All of the following apply to state government budgets EXCEPT:

• they are required by law.

• they are used for planning purposes.

• they are used to determine how much money will be needed to fund the government.

• deficit spending is permitted.

The interest that governments pay when they borrow money is based on their:

• performance indicator.

• management indicator.

• bond rating.

• budget rating.

The highest grade assigned by bond credit rating agencies is:

• AAAAA.

• A.

• AAA.

• AA.

__________ standards are used in a bond rating service’s assessment of the government’s financial management to determine the rating.

• Governmental Accounting Standards Board

• Credit

• Performance

• Management

__________ are usually considered too risky for anyone other than speculators.

• Bonds

• Stocks

• Junk bonds

• Loans

__________ was created in 1984 to establish standards for accounting by state and local governments.

• Standard & Poor’s

• Moody’s Investor Service

• Fitch Ratings Service

• The Governmental Accounting Standards Board

The __________ is the long-range government financial plan typically used to fund construction projects, road construction, and land acquisition.

• operating budget

• recommended budget

• adopted budget

• capital improvement budget

The adopted budget for the jurisdiction typically consists of the capital improvement budget and the:

• general budget.

• recommended budget.

• performance budget.

• operating budget.

A(n) __________ is the finalized budget that has been formally approved by the governing body of the jurisdiction.

• operating budget

• recommended budget

• adopted budget

• capital improvement budget

The __________ year is the budget cycle year, often July 1 through June 30.

• bond

• capital

• operating

• fiscal