Discuss AGA GAFRB Exam Topic 3 Question 22

A basic financial statement that includes a budgetary comparison serves to

Ademonstrate the ability of the entity to meet its commitments.

Bdemonstrate compliance with the legally adopted budget.

Cmeasure the service potential of physical and other resources.

Ddisclose and document the restrictions on resources.
A basic financial statement that includes a budgetary comparison (typically the Statement of Revenues, Expenditures, and Changes in Fund Balances -- Budget and Actual) is used to demonstrate whether the government complied with its legally adopted budget.
This is a core element of accountability in governmental financial reporting and is required under GASB Statement No. 34.
Relevant Reference:
GASB Statement No. 34 -- Budgetary Comparison Statements
GASB Codification Section 2400 -- Budgetary Accounting and Reporting
GFOA Best Practices -- Budget Monitoring and Reporting
Answer : B. demonstrate compliance with the legally adopted budget

Suggested Answer: B

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12 comments · newest first

Renea 1 month ago

Definitely B. It’s crucial for transparency in government.

Lorean 1 month ago

Agreed! Compliance shows accountability.

Ryan 1 month ago

I think the answer is B. It’s all about compliance.

Kristal 2 months ago

Really? I didn't know budget comparisons were that important!

Arlette 2 months ago

Definitely B, accountability is key in government finance.

Owen 2 months ago

Wait, I thought it was more about resource measurement?

Shay 2 months ago

Totally agree, B is the right choice!

Celestina 2 months ago

It's all about showing budget compliance!

Aretha 2 months ago

I’m a bit confused about the other options. I thought the budgetary comparison was strictly about compliance, but maybe it has other implications too?

Willetta 3 months ago

I recall that GASB Statement No. 34 emphasized the importance of budget compliance, so I’m leaning towards option B. It just makes sense in the context of governmental reporting.

Terina 3 months ago

I’m not entirely sure, but I feel like it could also relate to demonstrating the ability to meet commitments. That sounds familiar from practice questions.

Angelo 3 months ago

I think the budgetary comparison is mainly about showing compliance, right? I remember studying that it’s a key part of accountability.

AGA GAFRB Exam - Topic 3 Question 22 Discussion