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AAAE ACE Airport Finance Mod 2 |Questions
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Graded A+ 2025
Cash Basis Accounting ✔✔records revenues when cash is received and expenses when cash is paid
Accrual Basis Accounting ✔✔reporting income when it is earned and expenses when they are incurred, does not matter when cash is exchanged
Modified Accrual Accounting ✔✔recognized 1) revenues when the resulting current financial resources are both measurable and available to be used and 2) expenditures when they are incurred
GAAP Principles ✔✔Recognition, measurement, presentation, disclosure
Operating Budget ✔✔budget for day-to-day expenses covering the span of a year
Capital Budget ✔✔budget for major capital, or investment, expenditures covering up to 5-10 years, also subject to depreciation on accounting records
Budget Cycle ✔✔Planning, preparation, approval, execution (or expenditure), analysis, audit
Incremental Budget ✔✔Increases the previous year's budget by a percentage
Zero-Based Budget ✔✔allocates resources as if each budget was brand new not taking into account last year's budget
Management by Objectives (MBO) ✔✔Setting goals and then creating a budget to meet those goals
Activity-Based Budgeting (ABB) ✔✔Budgeting approach that focuses on the budgeted cost of the activities necessary to accomplish functions.
- Identify activities and their cost drivers
- Forecast number of units of cost driver for required activity level
- Calculate the cost driver (cost per unit of activity)
Statement of Net Position/Assets ✔✔Balance Sheet
Statement of Revenues, Expenses, and Changes in Net Position/Assets ✔✔Income Statement
Statement of Cash Flows ✔✔Statement of Cash Flows
Audit - unqualified opinion ✔✔Financial statements are presented fairly in accordance with GAAP
Audit - qualified opinion ✔✔Auditor is unable to state financial statements in compliance with GAAP either due to a few misstatements, portions are not presented in accordance with GAAP, or auditor was unable to audit one or more areas of financial statements, but rest are compliant with GAAP
CAFR — Comprehensive Annual Financial Report ✔✔GASB recommended financial report of all funds spent by government entity
PFC Report ✔✔Quarterly report stating PFC revenue earned, the PFC level for each project, and each project's schedule
SF-425 Federal Financial Report - AIP Grant Report ✔✔Federal funds expended, airport sponsor's share obligation, indirect expenses such as engineers and consultants
Form 126 - Financial Governmental Payment Report ✔✔Requires airports to report to the FAA the money spent on government services like police, HR, accounting, etc. so that funds aren't being diverted away illegally, that services are being paid fir at fair market value
Form 127 ✔✔Standardized form to report revenues, expenses, and other information to the FAA so that airports' financial statements are similar and not too different from each other
