[Jan-2022] AFP CTP Test Engine PDF - All Free Dumps from Actual4Labs
Get New CTP Certification – Valid Exam Dumps Questions
NEW QUESTION 80
Which two of the following are necessary to calculate average collected balances?
I. Deposit float
II. Reserve requirements
III. Ledger balance
IV.
Earnings credit rate
- A. I and II
- B. I and III
- C. II and IV
- D. III and IV
Answer: B
NEW QUESTION 81
XYZ Company experienced a substantial monetary loss due to over exposure to one particular sector of the stock market. The Treasurer had invested in companies tied to five different sectors, but violated the company investment policy by exceeding a 10% limit for any sector. In developing its investment policy, what should XYZ Company have considered to prevent this scenario?
- A. Internal and external controls
- B. Segregation of duties
- C. Exception management
- D. Diversification of investments
Answer: A
NEW QUESTION 82
Why would a company establish a short-term credit facility?
- A. Cash shortages are being forecasted due to seasonality.
- B. There is an anticipated failure of the company's main depository bank.
- C. The company would like to improve bank relationships.
- D. Short-term interest rates are expected to rise.
Answer: A
NEW QUESTION 83
To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley Act requires that:
- A. companies change accounting firms for audit services at least every seven years.
- B. employment of staff from companies' accounting firms be approved in advance by the audit committees.
- C. accounting firms supply audit work papers annually to the SEC for their clients.
- D. the lead audit partner and audit review partner be rotated every five years.
Answer: D
NEW QUESTION 84
Following the latest round of cost-cutting measures at ABC Corporation, the Treasury Department retained a headcount of 2 individuals. While the analyst was out sick, she gave her password to her Manager so that payments could be released via the bank's wire transfer system. The Manager sent 3 wires out with incorrect banking instructions. The problem was not identified until the angry suppliers called several weeks later demanding payment. The corporation has not yet recovered the $130,000 sent to erroneous accounts. In this instance, which control failed for ABC Corp.?
- A. Security within the bank's wire system
- B. Reconciliation of the bank statement
- C. Segregation of duties
- D. Three-way matching
Answer: C
NEW QUESTION 85
One of the advantages of raising capital through public offerings is that:
- A. large amounts of debt and equity can be raised at prevailing rates.
- B. it reduces fluctuations in the price of capital.
- C. it reduces the costs of managing reporting and disclosure.
- D. large amounts of debt and equity can be raised at the risk-free rate.
Answer: A
NEW QUESTION 86
On a statement of cash flow, which of the following items are considered sources of cash?
I. Increase in short-term investments II. Net income
III. Increase in accounts payable
IV.
Decrease in long-term debt
- A. I and III only
- B. II and III only
- C. II and IV only
- D. I, III, and IV only
Answer: B
NEW QUESTION 87
Which of the following are examples of covenants in loan agreements?
I.Financial ratios II.Corporate resolutions III.Borrower limitations IV.Borrower obligations
- A. I, II, and IV
- B. I, III, and IV
- C. II and III
- D. I and III
Answer: B
NEW QUESTION 88
What do MOST companies try to maintain due to the signaling effect and clientele effect?
- A. A stable dividend policy
- B. A stable policy of retained earnings
- C. A consistent payment date
- D. A dividend reinvestment plan
Answer: A
NEW QUESTION 89
A company has six fraudulent checks clear its primary disbursement account for a total of $7,652. The bank agrees to split the loss with the company to maintain a good relationship. As a condition of sharing the expense, the bank requires the company to establish positive pay on its disbursement accounts or have the company absorb the losses on future fraudulent payments.
What type of risk financing technique is the bank using?
- A. Crime insurance
- B. Self-insurance
- C. Risk retention
- D. Risk transfer
Answer: D
NEW QUESTION 90
True statements about the open account method of trade payment include which of the following?
I) A bank guarantees payment.
II) It is the most common type of trade credit.
III) A periodic credit review of each customer is required.
IV) The customer makes equal monthly payments.
- A. II only
- B. I and IV only
- C. II and III only
- D. I, III, and IV only
Answer: C
NEW QUESTION 91
A publicly held U.S. company has reported at the beginning of the year that it expects to
increase shareholder value by 5%. The current expectations are for interest rates to remain steady with a decline in fourth quarter. Treasury policy requires that investments be 90 days or less and investment grade. How should the company invest excess cash to support this goal?
- A. High-yield bonds
- B. BB rated bond
- C. Commercial paper
- D. 16-week U.S. Treasury bill
Answer: C
NEW QUESTION 92
Refer to the following information about a company at the end of its fiscal year.
The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal
tax rate is 35%.
What is the company's long-term debt to total capitalization ratio?
- A. 0.78
- B. 0.44
- C. 0.67
- D. 0.73
Answer: C
NEW QUESTION 93
An asset-based lender has decided to provide a loan to a company. In order to perfect its security interest in the assets used as collateral with the potential borrower, the lender will be MOST interested in reviewing which of the following?
- A. Age of receivables
- B. Delinquency payment record
- C. Lien search findings
- D. Book value of inventory
Answer: C
NEW QUESTION 94
Companies implement EDI in order to realize which of the following benefits?
I.Decreased error rates II.Decreased order lead time III.Improved productivity IV.Improved cash forecasting
- A. II, III, and IV only
- B. I and II only
- C. I, II, III, and IV
- D. I, III, and IV only
Answer: C
NEW QUESTION 95
Economists are forecasting a rise in gas prices within the next 3 months. Charged with the task of establishing a risk mitigation approach for the company, the CRO has determined that the company has considerable exposure to fluctuations in gas prices. In coming to this conclusion, the CRO:
- A. assessed financial derivatives.
- B. examined basic operating procedures.
- C. made a qualitative assessment.
- D. made a quantitative assessment.
Answer: D
NEW QUESTION 96
Which of the following MOST often contributes to the misinterpretation of DSO?
- A. Size of the payment discount
- B. Varying fiscal year-ends
- C. Sales patterns
- D. Weekends and holidays
Answer: C
NEW QUESTION 97
MICR encoding errors may be detected by all of the following TMS modules EXCEPT:
- A. positive pay module.
- B. prior day reporting.
- C. reverse positive pay module.
- D. current day reporting.
Answer: D
NEW QUESTION 98
ABC Company is an energy-holding company which owns a number of regulated power utilities that have monopolies in different regions. The majority of the holding company's income is realized from investment portfolios. The company has done well and is going to report its overallperformance to the public. What performance evaluation processes should management use to measure portfolio performance?
- A. Determining the return on equity of the company
- B. Benchmarking against competitors
- C. Calculating the total return of the portfolio
- D. Establishing market index benchmarks
Answer: D
NEW QUESTION 99
Which of the following are important uses of variance analysis in comparing actual cash flows with projected cash flows?
I) Identifying unanticipated changes in inventory
II) Enhancing short-term investment income
III) Validating a capital budget
IV) Identifying delays in accounts receivable collections
- A. I and II only
- B. I and IV only
- C. II and IV only
- D. I, II, III, and IV
Answer: B
NEW QUESTION 100
A privately held company is planning to issue an IPO. If the company decides to do so, which of the following will MOST LIKELY result?
- A. Decreased liquidity for the company's stock
- B. Increased managerial flexibility for owners of the company
- C. Decreased reporting and disclosure costs for company
- D. Increased ability to determine company value
Answer: D
NEW QUESTION 101
Company ABC has expanded its banking relationships due to international growth. ABC cannot figure out why its collection float amongst its international customers is longer than its domestic customers. Additionally, ABC is incurring significant costs related to the receipt and processing of these customer payments. ABC is MOST LIKELY experiencing issues related to:
- A. paper-based international payments.
- B. international wire transfer.
- C. international bank consolidations.
- D. SEPA credit transfer.
Answer: A
NEW QUESTION 102
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