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GAFRB Exam Questions & Answers

Examination 2: Governmental Accounting, Financial Reporting and Budgeting  •  AGA

115 Questions 120 min Updated Jul 2026 99% Pass Rate
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About GAFRB Exam

The GAFRB (Examination 2: Governmental Accounting, Financial Reporting and Budgeting) certification exam administered by the Association of Government Accountants (AGA) is a critical credential for professionals seeking to advance their careers in the public sector. This comprehensive examination tests candidates' expertise in governmental accounting principles, financial reporting standards, and budgeting processes essential for managing public funds effectively. Key topics covered include fund accounting, government-wide financial statements, modified accrual accounting, and the Governmental Accounting Standards Board (GASB) framework. Professionals working in federal, state, and local government agencies, as well as auditors and consultants supporting public organizations, should consider obtaining this valuable certification to demonstrate their competency and commitment to excellence in governmental financial management.

Preparing for the GAFRB exam requires dedication and access to quality study materials that align with current accounting standards and regulations. Updated exam dumps and comprehensive practice tests provide candidates with realistic assessment tools that simulate the actual testing environment, helping them identify knowledge gaps and build confidence before exam day. These resources enable learners to master complex governmental accounting concepts, understand practical applications of GASB standards, and develop proficiency in budgeting analysis. By utilizing practice tests and exam dumps throughout their preparation journey, candidates significantly increase their chances of passing the GAFRB examination on their first attempt, ultimately earning recognition as a competent governmental accounting professional.

Exam Topics & Objectives

Governmental Financial Accounting, Reporting and Budgeting: General Knowledge
40%
State and Local Financial Accounting and Reporting
30%
Federal Financial Accounting and Reporting
30%

4-Week Study Plan for GAFRB

Week 1: Governmental Accounting Fundamentals and General Knowledge

  • Study the governmental accounting conceptual framework and the hierarchy of Generally Accepted Accounting Principles (GAAP) for government
  • Master the differences between business-type and governmental-type activities
  • Learn the fund accounting structure and fund types used in government (General Fund, Special Revenue, Capital Projects, Debt Service, Permanent, Enterprise, Internal Service, Fiduciary)
  • Understand the modified accrual basis of accounting and full accrual basis of accounting applications
  • Study measurement focus concepts in governmental versus proprietary funds
  • Review the Budgetary Accounting requirements and encumbrance accounting
  • Complete practice questions on governmental accounting fundamentals (target 40% of study time)

Week 2: State and Local Government Financial Accounting and Reporting

  • Study the Governmental Accounting Standards Board (GASB) pronouncements specific to state and local entities
  • Learn the structure and components of the Comprehensive Annual Financial Report (CAFR)
  • Master accounting for General Fund revenues, expenditures, and encumbrances
  • Study special revenue fund accounting and reporting
  • Learn capital projects fund accounting including debt issuance and capital asset acquisition
  • Master debt service fund accounting and financial reporting requirements
  • Study permanent fund and fiduciary fund accounting (pension trust, investment trust, private-purpose trust, custodial funds)
  • Review the preparation of government-wide financial statements using accrual accounting
  • Complete practice questions on state and local accounting scenarios (target 30% of study time)

Week 3: Federal Financial Accounting and Reporting

  • Study the Federal Accounting Standards Advisory Board (FASAB) conceptual framework and standards
  • Learn the differences between FASAB standards and GASB standards for governmental entities
  • Master the structure of federal agency financial statements (Balance Sheet, Statement of Net Costs, Statement of Changes in Net Position, Statement of Budgetary Resources, Statement of Custodial Activity)
  • Study fund accounting in the federal government (General Fund, Revolving Funds, Special Funds, Deposit Funds, Trust Funds)
  • Review accounting for federal liabilities including employee leave and environmental liabilities
  • Learn budgetary accounting and reporting requirements specific to federal agencies
  • Study stewardship information and heritage assets reporting
  • Complete practice questions on federal financial accounting and reporting (target 30% of study time)

Week 4: Integrated Review, Problem-Solving, and Exam Preparation

  • Review and compare governmental, state/local, and federal accounting frameworks and identify key distinctions
  • Complete comprehensive case studies involving multiple fund types and accounting scenarios
  • Practice complex transactions spanning general knowledge, state/local, and federal topics
  • Review financial reporting requirements across all three areas with emphasis on compliance and presentation
  • Take full-length practice exams under timed conditions to simulate exam environment
  • Analyze performance on practice exams and identify weak areas for targeted review
  • Study financial statement preparation and analysis scenarios
  • Review key terminology, definitions, and acronyms across all three content areas
  • Complete final review of high-impact topics appearing frequently on past exams

Sample GAFRB Questions

Practice with real exam-style questions. Reveal answers to verify your knowledge.

Q1 MultipleChoice

A federal entity would record a payment of a payable in which of the following journal entries?

Q2 MultipleChoice

When an accounting principle established by GASB conflicts with an accounting principle established by FASB. the preparer of financial statements for a local government should observe

Q3 MultipleChoice

An agency's Fund Balance with Treasury is increased by which of the following events?

Q4 MultipleChoice

According to GAAP, all of the following should be addressed in the MD&A EXCEPT

Q5 MultipleChoice

An idle facility cost is an allowable expense to charge to federal grants when a

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Frequently Asked Questions

The GAFRB is the second examination in the AGA's Certified Government Financial Manager (CGFM) program. It focuses on governmental accounting principles, financial reporting standards, and budgeting processes specific to the public sector.

The exam covers governmental accounting and financial reporting standards, including GASB standards, fund accounting, financial statement preparation, and budgeting concepts. It also includes revenue recognition, expenditure accounting, and internal controls in governmental entities.

The GAFRB exam is typically a 3-hour computer-based test consisting of multiple-choice questions. Candidates must achieve a minimum score of 70% to pass the examination.

There are no formal prerequisites to take the GAFRB as a standalone exam. However, to earn the full CGFM credential, you must pass all three exams (Exam 1, 2, and 3) and meet specific work experience requirements in governmental accounting or financial management.

AGA offers official study materials, including review courses, study guides, and practice exams specifically designed for the GAFRB. Many candidates also review current GASB standards, government accounting textbooks, and participate in AGA study groups or webinars to prepare.
Exam Details
  • Exam CodeGAFRB
  • VendorAGA
  • Total Questions115
  • Duration120 min
  • LanguageEnglish
  • Last UpdatedJul 18, 2026
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