AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 111:

  All of the following are typical uses of a zero balance account EXCEPT:

  A. payroll.
  B. dividend payments.
  C. trade accounts payable.
  D. overnight investments.
  D. overnight investments.

• Question 112:

  A public company's risk profile is currently in balance. The management's mission statement is to minimize stock devaluation. However, it is forecasting a need for working capital in the short term. Which of the following solutions would BEST assist management in accomplishing its mission?

  A. Redeem outstanding shares
  B. Issue additional shares
  C. Use debt financing
  D. Pay out dividends
  C. Use debt financing

• Question 113:

  A company invests all of its short-term excess cash in T-bills on a daily basis. To prevent delays in processing its outgoing wire transfers, the company may ask its cash management bank to establish a:

  A. daylight overdraft line.
  B. letter of credit.
  C. revolving line of credit.
  D. net debit cap.
  A. daylight overdraft line.

• Question 114:

  Which of the following is NOT characteristic of commercial paper with a term of less than 270 days?

  A. It is usually sold through a dealer.
  B. It is considered an unsecured promissory note.
  C. It typically costs less than bank debt.
  D. It must be registered with the SEC.
  D. It must be registered with the SEC.

• Question 115:

  The auditors of a private college are examining and auditing the college's financial statements. The statements are not presented in accordance with GAAP. What should the auditors do?

  A. Issue a standard unqualified opinion.
  B. Not render an opinion.
  C. Base their opinion on GASB standards.
  D. Issue an adverse opinion.
  D. Issue an adverse opinion.

• Question 116:

  On the basis of the following exchange rates,

  

  which of the following currency amounts has the greatest value in U.S. dollars?

  A. C$750,000
  B. ?50,000
  C. 900,000
  D. ?,000,000
  B. ?50,000

• Question 117:

  A company which experiences increased business volumes but a minimal increase in profitability MOST LIKELY has:

  A. very high level of operating leverage.
  B. low fixed costs and high variable costs.
  C. high fixed costs and low variable cost.
  D. high effective cost of debt.
  B. low fixed costs and high variable costs.

• Question 118:

  A company has a line of credit and a bond trustee agreement with a bank. To prevent a decline in the company's bond rating from having a negative impact on the company's line of credit, the bank should have which of the following in place?

  A. Code of conduct
  B. Confidentiality agreement
  C. Notional barrier
  D. Risk profile
  C. Notional barrier

• Question 119:

  Which of the following is a source of short-term financing?

  A. Bond issuance
  B. Factoring of accounts receivable
  C. Issuance of common stock
  D. Retaining profits
  B. Factoring of accounts receivable

• Question 120:

  Which two of the following are methods for concentrating weekend deposits in a field deposit system? 1.Using a wire transfer for the funds on Monday 2.Anticipating deposits and initiating an ACH on Friday 3.Initiating an ACH cash concentration transaction on Thursday 4.Using a multibank lockbox network

  A. 1 and 2
  B. 1 and 3
  C. 2 and 3
  D. 2 and 4
  A. 1 and 2