AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 61:

  All of the following are reasons to use a confirmed irrevocable letter of credit EXCEPT concern about:

  A. the buyer's ability to pay.
  B. the ability to receive cross-border payments.
  C. foreign currency exposure.
  D. the stability of the buyer's bank.
  C. foreign currency exposure.

• Question 62:

  Which of the following statements is true about threshold concentration?

  A. Wire transfers are initiated on the basis of deposit information.
  B. Daily transfers are often needed to maintain balances at the desired level.
  C. Balances are set and funds above that level are transferred to the concentration bank.
  D. Balances are transferred to the concentration bank after reaching a predetermined level.
  D. Balances are transferred to the concentration bank after reaching a predetermined level.

• Question 63:

  Which of the following is a negotiable time draft?

  A. Commercial paper
  B. Check
  C. Master note
  D. Banker's acceptance
  D. Banker's acceptance

• Question 64:

  When considering Fedwire, ACH and CHIPS as 3 different payment systems, which of the following applies only to Fedwire?

  A. Real-time intraday net settlement of transactions.
  B. Company sends request of transfer directly to its bank.
  C. Settlement is final when receiving bank is notified of transfer.
  D. Each bank member funds an account maintained at the Fed.
  C. Settlement is final when receiving bank is notified of transfer.

• Question 65:

  The role of the depository bank in the check-clearing process is typically which of the following?

  A. To inspect the check for proper signature
  B. To encode the check amount on the MICR line
  C. To place a hold on the check until cleared
  D. To ensure that the check is not stale-dated
  B. To encode the check amount on the MICR line

• Question 66:

  All treasury policies should be approved by: A. external auditors.

  B. the SEC.
  C. legal counsel.
  D. the board of directors.
  D. the board of directors.

• Question 67:

  A U.S. company wants to increase its cash turnover rate. It is finding that customers are not taking the offered discount terms of 3/15, net 35. What action might the company take in order to achieve its goal?

  A. Increase the days' sales outstanding.
  B. Obtain short-term financing.
  C. Factor the accounts receivable.
  D. Change inventory accounting from FIFO to LIFO.
  C. Factor the accounts receivable.

• Question 68:

  In a private label financing arrangement, the seller does which of the following?

  A. Commits funds to finance accounts receivable.
  B. Operates its own credit function as a subsidiary.
  C. Receives the full face value of the sale in most cases.
  D. Loses authority to decide which customers receive credit.
  D. Loses authority to decide which customers receive credit.

• Question 69:

  What is a KEY reason that both a lessee and a lessor would enter into a lease financing agreement?

  A. It substitutes debt.
  B. It reduces technological obsolescence.
  C. It provides tax benefits.
  D. It eliminates maintenance of assets.
  C. It provides tax benefits.

• Question 70:

  A New York company wishes to use its treasury management system to send US funds to its London UK subsidiary. Which one of the following enables the same day settlement of funds transfer?

  A. Automated Clearing House
  B. Correspondent accounts with the Federal Reserve
  C. Bankers Automated Clearing Service
  D. Clearing House for Interbank Payment Systems
  D. Clearing House for Interbank Payment Systems