AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 681:

  All of the following bank products and services can simplify the preparation of the daily cash position EXCEPT:

  A. ACH concentration.
  B. balance reporting.
  C. account analysis.
  D. controlled disbursement.
  C. account analysis.

• Question 682:

  The risk that one financial institution's failure could lead to the failure of other financial institutions is known as:

  A. settlement risk.
  B. systemic risk.
  C. credit risk.
  D. fraud risk.
  B. systemic risk.

• Question 683:

  LST Company is a publicly traded company with $120 million in sales. Historically, LST does not extend credit to customers beyond net 45 terms. To help promote sale of a new product introduced into the market this year, LST offered financing terms to customers purchasing the new product. As a result, sales increased by 15% from the prior year and accounts receivable increased by 5%. At the end of their fiscal year LST had a $15 million sale to a new customer that was recorded as a note receivable. LST recognizes revenue when goods leave the facility. During the financial audit the auditors discovered that the customer did not receive the product until three days after the year-end. Under GAAP accounting, the auditors would MOST LIKELY render a(n):

  A. adverse opinion because the product not received before the fiscal year-end.
  B. qualified opinion because the product was not received before the fiscal year-end.
  C. unqualified opinion because the product was shipped before the fiscal year-end.
  D. disclaimed opinion because the product was shipped before the fiscal year-end.
  C. unqualified opinion because the product was shipped before the fiscal year-end.

• Question 684:

  The PRIMARY objective of a corporation is to:

  A. maximize value to shareholders.
  B. maximize cash inflows.
  C. minimize the cost of capital.
  D. maintain adequate liquidity.
  A. maximize value to shareholders.

• Question 685:

  The ACH system eliminates float because the:

  A. transactions are value-dated.
  B. transactions are initiated electronically.
  C. receiving and originating institutions settle simultaneously.
  D. Fed charges back the cost of float.
  C. receiving and originating institutions settle simultaneously.

• Question 686:

  What is the MOST appropriate rate used as the discount rate in calculating NPV?

  A. Marginal cost of capital
  B. IRR
  C. Cost of debt
  D. Internal transfer rate
  A. Marginal cost of capital

• Question 687:

  Recent improvements in the effectiveness of corporate governance are mostly due to the:

  A. Sarbanes-Oxley Act.
  B. Financial Crimes Enforcement Act.
  C. Securities Exchange Act.
  D. Gramm-Leach-Bliley Act.
  A. Sarbanes-Oxley Act.

• Question 688:

  A company wants to implement more control over its cash management system. Which aspect of the system is the most susceptible to external fraud?

  A. Collection
  B. Disbursement
  C. Concentration
  D. Reporting
  B. Disbursement

• Question 689:

  A retail brokerage firm is MOST like which one of the following types of financial institutions?

  A. Captive finance companies
  B. Factoring companies
  C. Investment banks
  D. Insurance companies
  C. Investment banks

• Question 690:

  I. Banker's acceptances

  II. Commercial paper

  III. U.S. Treasury bills

  IV. Federal agency securities

  Which of the following is the MOST usual ranking, from lowest to highest risk, of the investments listed above?

  A. I, III, IV, II
  B. III, IV, I, II
  C. IV, II, III, I
  D. IV, III, II, I
  I. Banker's acceptances II. Commercial paper III. U.S. Treasury bills IV. Federal agency securities Which of the following is the MOST usual ranking, from lowest to highest risk, of the investments listed above?
  B. III, IV, I, II