AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 381:

  The treasury manager of an auto-parts manufacturer has noticed that checks were sent to a foreign individual not on the approved vendor list. The payables manager has explained the payments but did not provide an invoice. The treasury manager did no further research and is later disciplined for:

  A. not reporting suspicious activity under the USA Patriot Act.
  B. not purchasing enough surety insurance.
  C. ignoring International Accounting Standards Board regulations.
  D. not implementing "Check 21."
  A. not reporting suspicious activity under the USA Patriot Act.

• Question 382:

  A financially sound company sends wires to investors in the morning but does not receive replacement funds until the afternoon. Which facility will the company MOST LIKELY arrange with its bank to facilitate the company's wire payment activities on any given day?

  A. A ledger overdraft
  B. A daylight overdraft
  C. A standby letter of credit
  D. A short-term line of credit
  B. A daylight overdraft

• Question 383:

  Company ABC has a concentrated investor base consisting primarily of large institutional shareholders. It would like to increase its number of smaller shareholders using the most cost effective method of raising capital available. What should Company ABC do to accomplish this goal?

  A. Issue preferred stock.
  B. Implement a dividend reinvestment plan.
  C. Issue warrants.
  D. Implement a stock repurchase plan.
  B. Implement a dividend reinvestment plan.

• Question 384:

  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
  I. Deposit float II. Reserve requirements III. Ledger balance IV. Earnings credit rate
  B. I and III

• Question 385:

  Treasury policies and procedures should include responsibilities for:

  A. determining when dividends should be paid.
  B. evaluating alternative capital projects.
  C. approving department salary increases.
  D. key personnel in the treasury organization.
  D. key personnel in the treasury organization.

• Question 386:

  To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley Act requires that:

  A. employment of staff from companies' accounting firms be approved in advance by the audit committees.
  B. companies change accounting firms for audit services at least every seven years.
  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.
  D. the lead audit partner and audit review partner be rotated every five years.

• Question 387:

  The delay between the time a lockbox site receives a check and the check is deposited is called:

  A. availability float.
  B. Fed float.
  C. mail float.
  D. processing float.
  D. processing float.

• Question 388:

  All of the following statements are true about loan participations EXCEPT:

  A. more than one lender commits to them.
  B. loan advances and payments are divided among the participants.
  C. loan servicing is provided by the lead institution.
  D. they are traded in the secondary market.
  D. they are traded in the secondary market.

• Question 389:

  In an international banking system, what role is commonly carried out by a large group of clearing banks?

  A. Payment system operators
  B. Bank regulators
  C. Lenders of last resort
  D. Government debt issuers
  A. Payment system operators

• Question 390:

  The lockbox receipt records for one 30-day month are provided below. The opportunity costs are 10%.

  

  What is the annual cost of float rounded to the nearest dollar?

  A. $167
  B. $385
  C. $417
  D. $500
  D. $500