COA COA Financial Management & Budgeting 3

Question 1

A capital expenditure (CapEx) differs from an operating expenditure (OpEx) because CapEx:

Accepted Answer

Involves purchasing long-term assets rather than day-to-day expenses

Answer

Is always less than $500

Answer

Is paid from the petty cash fund

Answer

Must be approved by front-line staff

Question 2

In the context of office procurement, the three-way match process verifies that:

Accepted Answer

The purchase order, receiving report, and vendor invoice all agree

Answer

Three managers have signed the check

Answer

Three vendors were quoted before ordering

Answer

The order was placed at least three days in advance

Question 3

Which financial ratio measures how quickly a business can pay its short-term liabilities with its most liquid assets?

Accepted Answer

Quick ratio

Answer

Debt-to-equity ratio

Answer

Gross margin ratio

Answer

Return on assets

Question 4

An accrual in accounting means:

Accepted Answer

Revenue or expense is recorded when earned or incurred, regardless of cash flow

Answer

Cash has already been received or paid

Answer

A budget line has been depleted

Answer

A vendor payment is overdue

Question 5

What is the primary purpose of an internal audit in an office environment?

Accepted Answer

To evaluate and improve the effectiveness of internal controls and processes

Answer

To file the company's tax return

Answer

To negotiate vendor contracts

Answer

To prepare payroll checks

Question 6

Cost-benefit analysis in office decision-making is used to:

Accepted Answer

Compare the expected costs of an action against its anticipated benefits

Answer

Determine employee performance ratings

Answer

Calculate tax obligations

Answer

Set the annual marketing budget