CPS CPS Financial Management and Budgeting 2

Question 1

Accounts payable represents money that a company:

Accepted Answer

Owes to suppliers

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

Budget appropriation

Answer

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

Question 4

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

Accepted Answer

Remain constant regardless of activity level

Answer

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

Question 5

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

Accepted Answer

Original receipts and company travel policy

Answer

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

CPS - Certified Professional Secretary Practice Test