CPS Financial Management and Budgeting Flashcards

Accounts payable represents money that a company:

Answer: Owes to suppliers

Accounts payable is a liability account representing amounts a company owes to vendors or suppliers for goods and services received but not yet paid.

A professional secretary is asked to reconcile the bank statement. What is the primary purpose of this task?

Answer: To ensure the company's cash records match the bank's records

Bank reconciliation ensures the company's internal cash records agree with the bank statement, catching errors and unrecorded transactions.

Which document formally authorizes a department to spend money up to a specified limit?

Answer: Budget appropriation

A budget appropriation is the formal authorization that allows a department to spend funds up to an approved limit during a budget period.

Fixed costs in a departmental budget are best described as costs that:

Answer: Remain constant regardless of activity level

Fixed costs remain constant over a relevant range of activity, such as rent or salaried employee costs, regardless of production or output volume.

An expense report submitted by an employee should be verified against which supporting documents?

Answer: Original receipts and company travel policy

Expense reports must be supported by original receipts and verified against company travel and expense policy to ensure compliance and accuracy.

What is the purpose of a chart of accounts in financial record-keeping?

Answer: To provide a systematic index of all financial accounts used in the general ledger

A chart of accounts is a structured list of all accounts in the general ledger, assigned numerical codes to organize financial transactions by category.