AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 41:

  A company is looking to improve its collection rate of returned checks. If the company implements re-presented check entry (RCK) with its bank, it might see a reduction in what type of returned items?

  A. Consumer payments less than $2,500
  B. Corporate payments less than $2,500
  C. Consumer payments more than $2,500
  D. Corporate payments more than $2,500
  A. Consumer payments less than $2,500

• Question 42:

  A disclaimer opinion is required on a set of financial statements when:

  A. material deviations from GAAP occur.
  B. the auditor is not independent.
  C. the financial statements may be misleading.
  D. the financial statements are fairly stated.
  B. the auditor is not independent.

• Question 43:

  Which of the following statements are true about the use of different discount rates for different types of projects?

  I.Low-risk, short-term projects may be evaluated by using a short-term opportunity cost.

  II.High-risk projects may be evaluated by using a discount rate that is greater than the company's normal opportunity cost.

  III.A

  short-term investment (or borrowing) rate may be used as the company's short-term discount rate. IV.The use of a lower discount rate for riskier projects forces riskier projects to earn higher rates of return.

  A. I and II only
  B. I and IV only
  C. I, II, and III only
  D. II, III, and IV only
  I. Low-risk, short-term projects may be evaluated by using a short-term opportunity cost. II.High-risk projects may be evaluated by using a discount rate that is greater than the company's normal opportunity cost. III.A short-term investment (or borrowing) rate may be used as the company's short-term discount rate. IV.The use of a lower discount rate for riskier projects forces riskier projects to earn higher rates of return.
  C. I, II, and III only

• Question 44:

  All of the following are advantages of using traditional financial ratios for analysis EXCEPT:

  A. they can easily be computed from the information found in publicly available financial reports.
  B. they usually reflect accounting rather than economic values.
  C. they can be used to view historical trends and availability over time.
  D. they allow comparisons to be made between like companies.
  B. they usually reflect accounting rather than economic values.

• Question 45:

  When evaluating candidates who have responded to an RFP for banking services, a highly leveraged company will probably apply a higher weighting to:

  A. flexible credit terms at competitive rates.
  B. the ability to customize services.
  C. the cost of switching providers.
  D. the adequacy of internal controls.
  A. flexible credit terms at competitive rates.

• Question 46:

  Which of the following types of payment transactions requires the authorization of both the initiating and the receiving party?

  A. A multiple drawee check
  B. A drawdown wire
  C. A depository transfer check
  D. A non-repetitive wire
  B. A drawdown wire

• Question 47:

  Which of the following factors will allow a company to decrease the amount of collected balances required to compensate its bank for services?

  A. An increase in the bank's earnings credit rate
  B. An increase in the bank's reserve requirement
  C. An increase in FDIC insurance charges
  D. A carry-over of a prior period's deficient balance
  A. An increase in the bank's earnings credit rate

• Question 48:

  A public corporation may value a defined contribution plan highly because it:

  A. allows the corporation to capture plan investment surpluses.
  B. allows proxy voting in favor of management.
  C. shifts investment shortfall risk to employees.
  D. defines allowed investments within the plan.
  C. shifts investment shortfall risk to employees.

• Question 49:

  The CFO asks the Treasurer to create a new collections and concentration policy for their company. Following implementation of the policy, the company finds that reporting of receivables values is taking 10% longer, with no improvement in the company's cash flow or liquidity. What step in developing the policy could have been executed better?

  A. Drafting the policy
  B. Approval of the policy
  C. Procedure implementation
  D. Identify issues and conduct analysis
  D. Identify issues and conduct analysis

• Question 50:

  Company ABC experienced a loss in the past when an employee in the treasury department was able to transfer $1.5 million to a personal account offshore. The company is working with a security agent to prevent this from happening in the future. ABC also accepts a large number ofchecks as payment. The agent has suggested upgrades to ABC's payment process. What step should be taken to help mitigate this type of risk in the future?

  A. Securely store check stock.
  B. Set up international bank security.
  C. Implement dual approval.
  D. Implement data security standards.
  C. Implement dual approval.