AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 801:

  Company XYZ sends an ACH debit file valued at $300,000 with an average item value of $1,000. The file settlement date is March 10. The file contains no duplicate items and items are split equally between corporate and consumer items. One percent of consumer items and 2% of corporate items were returned. What would be the final net settlement value for Company XYZ?

  A. $291,000
  B. $295,500
  C. $297,000
  D. $298,500
  B. $295,500

• Question 802:

  Major Manufacturing Inc. (MMI) is a manufacturer of customized restaurant equipment. MMI's supplier relations policy is to take advantage of trade discounts, when available. All suppliers offer payment terms of 1/10, net 30. MMI invoices customers at the end of its 30- day manufacturing cycle. Which of the following is the correct chronological sequence of the events listed?

  1.

  Customer invoice is sent.

  2.

  Supplier payment is sent.

  3.

  Customer payment is received.

  4.

  Order is shipped.

  5.

  Customer order is received.

  6.

  Supplier order is placed.

  A. 5, 6, 2, 4, 1, 3
  B. 5, 6, 4, 2, 3, 1
  C. 6, 5, 2, 4, 3, 1
  D. 6, 5, 4, 2, 1, 3
  A. 5, 6, 2, 4, 1, 3

• Question 803:

  BF Company, a manufacturer of food products, reported financial information shown in the table below for the end of the year.

  

  BF Company is subject to covenants under its revolving credit facility. It is in compliance with which of the following?

  A. Maximum debt to tangible net worth ratio of 1.5:1
  B. Minimum times interest earned of 3.0 times
  C. Dividends cannot exceed 15% of retained earnings
  D. Minimum current ratio of 1.25:1.0
  D. Minimum current ratio of 1.25:1.0

• Question 804:

  When a paper check is converted to an electronic form:

  A. the payment becomes irrevocable and unconditional.
  B. it falls under the rules of Regulation E.
  C. the source document is always returned to the originator.
  D. it retains its status as a check.
  B. it falls under the rules of Regulation E.

• Question 805:

  Which of the following is a common approach to negotiating EDI payment terms versus paper payment terms?

  A. Offering lower discounts for electronic payments than for paper payments
  B. Offering payment terms that are float-neutral for both payment formats
  C. Making the electronic payments due earlier than paper payments
  D. Having the same due date for electronic and paper payments
  B. Offering payment terms that are float-neutral for both payment formats

• Question 806:

  An airline wants to lock in the price of the jet fuel it needs to purchase to satisfy the peak in- season demand for travel. The airline wants to manage its exposure to fluctuations in fuel prices. What type of exposure is this?

  A. Translation
  B. Delivery
  C. Commodity
  D. Speculative
  C. Commodity

• Question 807:

  XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to issue several million dollars of private equity to the chairman of the board. If the company proceeds with this plan, the company may:

  A. not comply with SOX requirements.
  B. violate shareholder pre-emptive rights.
  C. require approval from PCAOB.
  D. need to report the large currency transaction.
  B. violate shareholder pre-emptive rights.

• Question 808:

  Which of the following business practices does NOT comply with the Uniform Commercial Code?

  A. A company reconciles its bank statements within 30 days of receipt.
  B. A company receives a check marked "paid in full" and disputes it 120 days later.
  C. A bank exercises ordinary care when it examines signatures on checks received.
  D. A bank elects to return stale-dated items.
  B. A company receives a check marked "paid in full" and disputes it 120 days later.

• Question 809:

  A treasury manager has $5 million that is not needed for 6 months. The treasury manager has decided to invest the funds in a liquid instrument, using the current portion of a 5-year AA rated corporate bond that is subject to U.S. Securities and Exchange Commission (SEC) regulations. In what market would the treasury manager purchase this investment?

  A. IPO Market
  B. Private Market
  C. Primary Market
  D. Secondary Market
  D. Secondary Market

• Question 810:

  With the advent of the euro, many U.S. companies have seen a reduction in their number of foreign currency transactions. As a result, these U.S. companies have benefited from which of the following?

  I. Reduced FX transaction costs

  II. Consolidated banking relationships

  III. Simplified exchange risk management

  IV.

  Reduced need to monitor foreign political climates

  A. I and II
  B. II and III
  C. I, III, and IV
  D. I, II, and III
  I. Reduced FX transaction costs II. Consolidated banking relationships III. Simplified exchange risk management IV. Reduced need to monitor foreign political climates
  D. I, II, and III