AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 401:

  What is the primary weakness of a risk management policy that includes risk control without specifically providing a plan for risk financing?

  A. Resources are used to pay for losses that could have been prevented.
  B. Funding must be set aside for self-insurance.
  C. There is an increase in the potential for claims of negligence.
  D. Catastrophic losses could result in bankruptcy.
  D. Catastrophic losses could result in bankruptcy.

• Question 402:

  Subtracting dividends from net income available to common shareholders is reflected as a change to which of the following balance sheet items?

  A. Treasury stock
  B. Paid-in capital
  C. Common stock at par value
  D. Retained earnings
  D. Retained earnings

• Question 403:

  What type of tax does a multinational auto manufacturer commonly pay in foreign countries at each stage of a vehicle's production?

  A. Withholding tax
  B. Capital tax
  C. Value added tax
  D. Asset tax
  C. Value added tax

• Question 404:

  In a large company, the person who normally oversees both the treasury and the accounting functions is the:

  A. treasurer.
  B. chief operations officer.
  C. chief financial officer.
  D. controller.
  C. chief financial officer.

• Question 405:

  A telecommunications company receives a profit of $587,542 from its cellular phone production unit in the year after investing $962,870 in a new product line. What is the first year return on its original investment?

  A. 56%
  B. 58%
  C. 61%
  D. 64%
  C. 61%

• Question 406:

  The term "factoring" refers to a:

  A. mathematical formula used in calculating bond prices.
  B. short-term financing method.
  C. reduction of bank fees related to volume.
  D. Federal Reserve Open Market Committee activity.
  B. short-term financing method.

• Question 407:

  A large mature company with limited growth opportunities (positive NPV projects) achieved abnormally high profits this year. After paying mandatory principal, interest, and taxes, the company has $200 million in surplus cash on hand. Assuming its investor base is most concerned with capital appreciation, which of the following is the BEST option for the company?

  A. Declare a special dividend.
  B. Reinvest cash into the company.
  C. Declare a cash dividend.
  D. Repurchase shares of outstanding stock.
  D. Repurchase shares of outstanding stock.

• Question 408:

  Which of the following is NOT a short-term cash forecasting technique?

  A. Income statement forecast
  B. Distribution forecast
  C. Receipts and disbursements forecast
  D. Accounts receivable balance pattern forecast
  A. Income statement forecast

• Question 409:

  All of the following are an EDI benefit EXCEPT:

  A. improved productivity.
  B. lower error rates.
  C. improved cash forecasting.
  D. lower start-up costs.
  D. lower start-up costs.

• Question 410:

  Company XYZ's government relations team has done a poor job in maintaining and nurturing its relationship with the local government. Because of new business ventures it is pursuing, the company needs a method that will help it monitor and collect international accounts receivables between subsidiaries. What technique is more suited given its situation?

  A. Internal factoring
  B. Re-invoicing
  C. Bilateral netting
  D. Multilateral netting
  A. Internal factoring