COA COA Financial Management & Budgeting

Question 1

Which financial document summarizes an organization's revenues, expenses, and net income over a specific period?

Accepted Answer

Income statement

Answer

Balance sheet

Answer

Cash flow statement

Answer

Statement of retained earnings

Question 2

A budget that adjusts for changes in activity levels or volume is called a:

Accepted Answer

Flexible budget

Answer

Static budget

Answer

Zero-based budget

Answer

Capital budget

Question 3

In accounts payable management, the term 'net 30' means:

Accepted Answer

Payment is due within 30 days of the invoice date

Answer

A 30% discount applies to the invoice

Answer

The invoice covers 30 days of service

Answer

A 30-day extension can be requested

Question 4

Which budgeting method requires managers to justify every line-item expense from scratch each period?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Activity-based budgeting

Answer

Rolling budget

Question 5

Petty cash is best described as:

Accepted Answer

A small fund used for minor day-to-day office expenses

Answer

The company's main operating account

Answer

Funds reserved for emergencies only

Answer

The payroll processing account

Question 6

What is the purpose of a purchase order (PO) in office financial management?

Accepted Answer

To authorize and document a request to buy goods or services

Answer

To record received payments from clients

Answer

To track employee expense reimbursements

Answer

To record depreciation of assets