AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 791:

  Which of the following would increase if the Fed were to announce a reduction in reserve requirements?

  A. Monthly service charges
  B. Monthly earnings credits
  C. Average collected balances
  D. Fed float
  B. Monthly earnings credits

• Question 792:

  ABC Company, a U.S. company, has an overseas customer, XYZ Inc., who wants to purchase $3.1 million of equipment from ABC Co. XYZ Inc. wants to structure payment by paying 10% at time of order, 40% at time of shipment and the remaining 50% at time of receipt of the equipment. The last time XYZ Inc. purchased equipment from ABC Co. they never paid the final 50%, claiming the equipment did not work properly. Which of the following can ABC Co. use for this transaction to guarantee payment?

  A. Installment credit
  B. Documentary collection
  C. Performance guarantee
  D. Commercial letter of credit
  D. Commercial letter of credit

• Question 793:

  ACCOUNTS RECEIVABLE AT THE END OF MARCH

  

  On the basis of the accounts receivable balance pattern above and April sales of $600, the cash flow forecast for April is:

  A. $440.
  B. $715.
  C. $875.
  D. $925.
  A. $440.

• Question 794:

  XYZ Company has incurred a financially devastating event because of a hurricane at its offshore manufacturing plant. Due to the impact on liquidity, the company may not be able to survive. What should the Treasurer have done in order to assess the risk associated with this type of event?

  A. Purchase sufficient insurance
  B. Negotiate back-up lines of credit
  C. Develop a contingency funding plan
  D. Evaluate financial derivatives contract
  C. Develop a contingency funding plan

• Question 795:

  Three college roommates open a fast-food restaurant chain after graduation. They decide to offer a 401(k) plan to all of their 700+ employees and a defined benefit retirement plan for themselves and their six Group Vice Presidents. If the company initially funds the defined benefit plan with $10 million and is in the 32% tax bracket, what is the after-tax cost of the funding?

  A. $3.2 million
  B. $6.8 million
  C. $10.0 million
  D. $13.2 million
  C. $10.0 million

• Question 796:

  A nationwide retailer has been making EFT payments to its suppliers for several years. It will expand its processes to include consumer payments in its EFT initiative. Which of the following will support this initiative at the point-of-sale?

  A. Check truncation
  B. Consumer-to-business
  C. Paid-on-production
  D. Prearranged payment
  A. Check truncation

• Question 797:

  Which agency appoints the chairman and members of the Public Company Accounting Oversight Board?

  A. SEC
  B. NYSE
  C. OCC
  D. IRS
  A. SEC

• Question 798:

  From a consumer's perspective, all of the following are true of both debit cards and credit cards EXCEPT:

  A. transactions are posted to bank accounts as withdrawals.
  B. transactions may require authorization from the card issuer.
  C. transactions can be conducted at automated teller machines.
  D. merchants receive availability within three business days.
  A. transactions are posted to bank accounts as withdrawals.

• Question 799:

  On June 1, a manufacturing company experienced a system failure that lasted more than 24 hours. The company did not have any contingency plans in place and as a result the cash manager was unable to process the following payments: $25,000 to the p-card issuer, $125,000 for weekly payroll, $500,000 for a bond interest payment, $260,000 for the weekly vendor payments and $50,000 for the monthly utilities. The receivables were deposited at the bank; however, the cash manager does not have a way to confirm the amounts. The suppliers are threatening to stop shipments due to the delay in payment and the loss of supplier shipments threatens the company's just-in-time production. What did the manufacturing company trigger as a result of the system failure?

  A. Supplier risk
  B. Default on the debt
  C. Electronic security risk
  D. Contingency business resumption plan failure
  B. Default on the debt

• Question 800:

  A U.S. bank regularly transmits international payments to European based XYZ Bank. The payments flow through an intermediary bank. Recently regulators audited the intermediary bank and discovered the bank may be unknowingly facilitating illegal activities. What payment method was MOST LIKELY used?

  A. Cover payments
  B. Drawdown wires
  C. CHIPS payments
  D. Semi repetitive wires
  A. Cover payments