CAP Financial Management and Budgeting 3

Question 1

What is the primary purpose of an internal audit in an organization?

Accepted Answer

To independently assess internal controls, compliance, and risk management

Answer

Internal audits evaluate the effectiveness of internal controls, risk management, and compliance with policies and regulations.

Question 2

A budget that is updated monthly by adding a new future period as each current period ends is called a:

Accepted Answer

Rolling (continuous) budget

Answer

A rolling budget continuously extends the planning horizon by adding a new period as each completed period drops off.

Question 3

Which principle requires that expenses be recorded in the same period as the revenue they helped generate?

Accepted Answer

Matching principle

Answer

The matching principle requires expenses to be recognized in the same accounting period as the revenues they generated.

Question 4

An administrative professional discovers a duplicate vendor invoice has been paid. What is the correct course of action?

Accepted Answer

Notify the accounts payable manager and request a refund or credit from the vendor

Answer

Duplicate payments must be reported to accounts payable immediately so a vendor refund or credit can be pursued.

Question 5

What does ROI stand for, and how is it calculated?

Accepted Answer

Return on Investment — (net benefit / cost of investment) × 100

Answer

ROI (Return on Investment) measures profitability as a percentage: (net benefit ÷ cost of investment) × 100.

CAP - Certified Administrative Professional Practice Test