AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 591:

  A North American service company has autonomous offices in different geographic regions each handling their own sales and accounts receivables deposits to local banks which primarily consist of checks. By implementing a lockbox collection system, what objective in its collection policy would it have met?

  A. Payment float
  B. Cost efficiency
  C. Segregation of duties
  D. Customer satisfaction
  B. Cost efficiency

• Question 592:

  One of the advantages of raising capital through public offerings is that:

  A. it reduces fluctuations in the price of capital.
  B. it reduces the costs of managing reporting and disclosure.
  C. large amounts of debt and equity can be raised at the risk-free rate.
  D. large amounts of debt and equity can be raised at prevailing rates.
  D. large amounts of debt and equity can be raised at prevailing rates.

• Question 593:

  Which of the following can be related to a company's stock price?

  A. Economic Value Added
  B. Residual Income
  C. Return on Investment
  D. Operating Profit
  A. Economic Value Added

• Question 594:

  Which of the following statements is true about futures contracts?

  A. They can be created for any asset over any period of time and for any amount.
  B. They are marked-to-market on a daily basis.
  C. Their margin requirements are normally 50%.
  D. Their losses are limited to the initial investment divided by the margin requirement.
  B. They are marked-to-market on a daily basis.

• Question 595:

  What is the reserve-requirements provision of the Federal Reserve Act of 1913 known as?

  A. Regulation D
  B. Regulation E
  C. Regulation J
  D. Regulation Q
  A. Regulation D

• Question 596:

  Which of the following ASC X12 transactions is used to confirm the receipt and compliance of transmitted sets?

  A. 821
  B. 822
  C. 835
  D. 997
  D. 997

• Question 597:

  A company with $50 million in foreign assets decides to increase its foreign debt by $40 million for a debt ratio of 80%. This action will reduce which exposure?

  A. Hedged
  B. Economic
  C. Transaction
  D. Translation
  D. Translation

• Question 598:

  A firm's air conditioning unit breaks down unexpectedly and must be replaced immediately. What type of liquidity requirement is this an example of?

  A. Transaction
  B. Precautionary
  C. Speculative
  D. Opportunity
  B. Precautionary

• Question 599:

  A U.S. company decides to enter a new geographic market facing some dominant competitors, but projects sales growth of 40% in its first year due to its superior product line. The company decides to only offer electronic payment methods for settlement of its receivables. A year later, the company's sales volume only increases by 10%, but their average days' sales outstanding of 32 days is the best in the industry. What should the company have considered in its collection policy objectives?

  A. Cost efficiency
  B. Customer satisfaction
  C. Performance measurement
  D. Approved collection practices
  B. Customer satisfaction

• Question 600:

  Which of the following is an important component of corporate governance?

  A. The existence of a large number of institutional investors
  B. The activities of independent outside auditors
  C. The existence of a matrix management structure
  D. The level of compliance with GAAP
  B. The activities of independent outside auditors