CTP FINAL REVIEW SET 2
Of the following, which is considered the MOST significant source of internal risk?
Defalcation
Employment law liability
Loss of key personnel
Data entry errors correct answerData entry errors
Which of the following categories of ratios measures profitability in relation to revenue and investment?
Performance ratios
Efficiency or asset management ratios
Liquidity or working capital ratios
Debt management ratios correct answerPerformance ratios
,Which of the following is a true statement regarding a bank obligation?
Eurodollar deposits are time deposits denominated in the euro
A banker's acceptance can be sold for full value prior to maturity
Non-negotiable certificates of deposit (CDs) are discounted instruments
Retail certificates of deposit (CDs) lack a secondary market correct answerRetail certificates of deposit
(CDs) lack a secondary market
Which of the following has added significant regulatory and compliance overhead for organizations with
large numbers of financial transactions, especially those transactions that may be potentially related to
money laundering?
Garn-St. Germain Depository Institutions Act
Federal Insurance Contribution Act
Sarbanes-Oxley Act
USA PATRIOT Act correct answerUSA PATRIOT Act
A division of a toy company has net income of $2,000, short-term debt of $2,000, long-term debt of
$5,000 and shareholder's equity of $20,000. The division has the opportunity to invest in a new line of
collectible cards, which would increase its short-term debt to $3,000, long-term debt to $15,000, and
net income to $2,600. The overall cost of capital for the toy division's holding company is 7%. What
would the residual income be before and after the investment?
$110 before and -$60 after
,$110 before and $150 after
$250 before and -$60 after
$250 before and $150 after correct answer$250 before and $150 after
How are the percentages in receivables balance patterns established?
Using a distribution forecast
Using cash forecasting
Using a cash conversion efficiency analysis
Using a company's collection history correct answerUsing a company's collection history
A company has subsidiaries in the United States (U.S.), United Kingdom (U.K.), Germany and Japan. The
U.S. subsidiary sends invoices to the U.K, and German subsidiaries and pays invoices to the U.K, German
and Japanese subsidiaries. A re-invoicing center would affect the U.S. subsidiary in which of the
following ways?
Eliminate currency exposures for transactions to Japan but not two-way U.K. and German transactions
Reduce currency exposures to the net amount owed or due to the U.S. subsidiary
Eliminate currency exposures for transactions to the U.K. and Germany but not one-way transactions to
Japan
, Eliminate all currency exposures correct answerEliminate all currency exposures
For global companies whose stock is traded in the United States, significant streamlining of their
accounting processes will be enabled by worldwide adoption of
Generally Accepted Accounting Principles (GAAP).
International Financial Reporting Standards (IFRS).
Association of Chartered Certified Accountants (ACCA) certification as an auditing standard.
Accounting Standards Codification (ASC) Topics. correct answerInternational Financial Reporting
Standards (IFRS).
A company with no preferred stocks or options and 200,000 shares of common stock (par value $1) has
$400,000 in retained earnings and $4,000,000 in additional paid-in capital. (The market value per share
is currently $21.) What is the company's book value per share?
$3
$21
$22
$23 correct answer$23
What is the holding period yield for a $100,000 T-bill that was purchased for $96,500 and matures in 120
days?
Of the following, which is considered the MOST significant source of internal risk?
Defalcation
Employment law liability
Loss of key personnel
Data entry errors correct answerData entry errors
Which of the following categories of ratios measures profitability in relation to revenue and investment?
Performance ratios
Efficiency or asset management ratios
Liquidity or working capital ratios
Debt management ratios correct answerPerformance ratios
,Which of the following is a true statement regarding a bank obligation?
Eurodollar deposits are time deposits denominated in the euro
A banker's acceptance can be sold for full value prior to maturity
Non-negotiable certificates of deposit (CDs) are discounted instruments
Retail certificates of deposit (CDs) lack a secondary market correct answerRetail certificates of deposit
(CDs) lack a secondary market
Which of the following has added significant regulatory and compliance overhead for organizations with
large numbers of financial transactions, especially those transactions that may be potentially related to
money laundering?
Garn-St. Germain Depository Institutions Act
Federal Insurance Contribution Act
Sarbanes-Oxley Act
USA PATRIOT Act correct answerUSA PATRIOT Act
A division of a toy company has net income of $2,000, short-term debt of $2,000, long-term debt of
$5,000 and shareholder's equity of $20,000. The division has the opportunity to invest in a new line of
collectible cards, which would increase its short-term debt to $3,000, long-term debt to $15,000, and
net income to $2,600. The overall cost of capital for the toy division's holding company is 7%. What
would the residual income be before and after the investment?
$110 before and -$60 after
,$110 before and $150 after
$250 before and -$60 after
$250 before and $150 after correct answer$250 before and $150 after
How are the percentages in receivables balance patterns established?
Using a distribution forecast
Using cash forecasting
Using a cash conversion efficiency analysis
Using a company's collection history correct answerUsing a company's collection history
A company has subsidiaries in the United States (U.S.), United Kingdom (U.K.), Germany and Japan. The
U.S. subsidiary sends invoices to the U.K, and German subsidiaries and pays invoices to the U.K, German
and Japanese subsidiaries. A re-invoicing center would affect the U.S. subsidiary in which of the
following ways?
Eliminate currency exposures for transactions to Japan but not two-way U.K. and German transactions
Reduce currency exposures to the net amount owed or due to the U.S. subsidiary
Eliminate currency exposures for transactions to the U.K. and Germany but not one-way transactions to
Japan
, Eliminate all currency exposures correct answerEliminate all currency exposures
For global companies whose stock is traded in the United States, significant streamlining of their
accounting processes will be enabled by worldwide adoption of
Generally Accepted Accounting Principles (GAAP).
International Financial Reporting Standards (IFRS).
Association of Chartered Certified Accountants (ACCA) certification as an auditing standard.
Accounting Standards Codification (ASC) Topics. correct answerInternational Financial Reporting
Standards (IFRS).
A company with no preferred stocks or options and 200,000 shares of common stock (par value $1) has
$400,000 in retained earnings and $4,000,000 in additional paid-in capital. (The market value per share
is currently $21.) What is the company's book value per share?
$3
$21
$22
$23 correct answer$23
What is the holding period yield for a $100,000 T-bill that was purchased for $96,500 and matures in 120
days?
