Module 2: Operating, Budgeting, Accounting and Reporting

Question 1

In 1970, who redefined accounting as a service activity whose function is to provide quantitative information primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

Answer 1

American Institute of Certified Public Accountants (AICPA)’s Accounting Principles Board

Question 2

Name the three types of accounting bases that define the timing of recording transactions.

Answer 2

1. Cash Basis
2. Accrual Basis
3. Modified Accrual Basis

Question 3

Name the 7 main accounting functions.

Answer 3

1. Accounts Payable (AP)
2. Accounts Receivable (AR)
3. Payroll
4. General Ledger (GL)
5. Grant Accounting
6. Financial Reporting
7. Budgeting

Question 4

According to GAAP, all transactions are recorded using what method?

Answer 4

double-entry method

Question 5

What is the list of all accounts used in recording transactions called?

Answer 5

chart of accounts

Question 6

What are the two policy setting boards established by the Financial Accounting Foundation (FAF)?

Answer 6

Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB)

Question 7

The standards that FASB and GASB prescribe are known as what?

Answer 7

Generally Accepted Accounting Principles (GAAP)

Question 8

GAAP includes principles on what?

Answer 8

Recognition, Measurement, Presentation, and Disclosure

Question 9

This is defined as techniques and concepts for integrated management of businesses as a whole from the viewpoint of the effective use of management resources to improve the efficiency of enterprise management.

Answer 9

Enterprise Resource Planning (ERP)

Question 10

This is a forecast of revenues and expenses for a specific period of time.

Answer 10

budget

Question 11

What are the two main types of budgets?

Answer 11

operating and capital

Question 12

This type of budget addresses items that are viewed as investments in assets that have useful lives extending beyond a single fiscal year and exceeding a certain value (as determined by the airport’s capitalization policy).

Answer 12

capital budget

Question 13

What are the six steps in the budgeting cycle?

Answer 13

Planning, Preparation, Approval, Execution (or Expenditure), Analysis, and Audit

Question 14

What are the three different budgeting responsibility types?

Answer 14

top-down, bottom-up, collaborative (or negotiated) budgeting

Question 15

Name the four types of budgeting techniques discussed in this module?

Answer 15

1. Incremental Budgeting
2. Zero-Based Budgeting (ZBB)
3. Management by Objectives (MBO)
4. Activity-Based Budgeting (ABB)

Question 16

This organization represents public finance officials throughout the U.S. and Canada with a mission to advance excellence in public finance.

Answer 16

Government Finance Officers Association (GFOA)

Question 17

What are the three basic financial statements that airports provide at the end of each fiscal year?

Answer 17

1. Statement of Net Positions (balance sheet)
2. Statement of Revenues, Expenses, and Changes in Net Position/Assets (income statement)
3. Statement of Cash Flows

Question 18

The Cash Flow Statement breaks down cash flow from what three different activities?

Answer 18

1. Cash Flow from Operations
2. Cash Flow from Investing Activities
3. Cash Flow from Financing Activities

Question 19

What are the four types of audit opinions?

Answer 19

1. Unqualified Opinion (“clean”)
2. Qualified Opinion
3. Disclaimer of Opinion
4. Adverse Opinion

Question 20

This type of audit is required from all non-federal government agencies and non-profit organizations that expend $750,000 or more in federal grants during a fiscal year.

Answer 20

Single Audit (formerly a A-133 Audit)

Question 21

This type of audit is required of most commercial service airports to provide an opinion of the fairness and reasonableness of the public agency’s procedures for receiving, holding, and using PFC revenue.

Answer 21

PFC Audit

Question 22

Name five entities that the airport must ensure receive copies of the financial statement audit.

Answer 22

1. Banks or financial institutions via loans or financing documents
2. Bond insurance agency
3. Bond trustees
4. Municipal Securities Rulemaking Board (MSRB) Electronic Municipal Market Access (EMMA) website
5. Any overseeing governmental entity of the airport

Question 23

What is the name of the DOTs web-based portal for grant recipients to request grant payments and monitor the status of those payments?

Answer 23

Delphi eInvoicing System

Question 24

An agreement between two or more governments to solve problems of mutual concern.

Answer 24

Intergovernmental Agreements (IGA)

Question 25

The FAA requires the airport sponsors to submit a 5-year what? And update it annually indicating expected capital expenditures during that time?

Answer 25

Capital Improvement Plan (CIP)

Question 26

States that participate in this program receive AIP funds and prioritize, select, and fund AIP projects at defined small airports.

Answer 26

State Block Grant Program

Question 27

This report, prepared by government entities as encouraged by GASB, encompasses all funds of the primary government.

Answer 27

Comprehensive Annual Financial Report (CAFR)

Question 28

The minimum required sections of the CAFR?

Answer 28

1. Introductory Section
2. Financial Section
3. Statistical Section

Question 29

What makes up the Financial Section of a CAFR?

Answer 29

1. Independent Auditor’s Report
2. Management’s Discussion & Analysis (MD&A)
3. Financial Statements
4. Supplementary Info, other than MD&A
5. Combined and individual fund statements and schedules

Question 30

What 5 categories of statistical information are required in the CAFR?

Answer 30

1. Financial trends
2. Revenue capacity
3. Debt capacity
4. Demographic & economic information
5. Operating information

Question 31

According to 14 CFR, Part 158, how often must airports file PFC reports?

Answer 31

quarterly

Question 32

What is required in the quarterly PFC report?

Answer 32

1. Actual PFC revenue received; interest earned, & project expenditures
2. Cumulative PFC revenue received, interest earned, project expenditures, and amount committed for use on currently approved projects.
3. PFC level for each project.
4. Each projects current schedule.

Question 33

What are the two different FAA AIP Grant reports outlined in the AIP handbook?

Answer 33

1. Quarterly Performance Report
2. Federal Financial Report (SF-425)

Question 34

What are the two financial reports/forms that all U.S. commercial airports must file with the FAA?

Answer 34

Form 126 “Financial Governmental Payment Report” and Form 127 “The Operating and Financial Summary”

Question 35

What section of Form 127 is optional for an airport having fewer than 25,000 enplanement in the preceding calendar year?

Answer 35

Section 16 - operating statistics

Question 36

What calculation on Form127 is found by dividing the passenger airline aeronautical revenue by the enplanements reported?

Answer 36

Cost Per Enplaned Passenger (CPE)