CPS CPS Financial Management and Budgeting

Question 1

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

Accepted Answer

Income statement

Answer

Balance sheet

Answer

Cash flow statement

Answer

Accounts payable ledger

Question 2

A professional secretary processing a vendor invoice should first verify that a matching document exists. What is this three-way matching process?

Accepted Answer

Purchase order, invoice, and receiving report

Answer

Invoice, check, and bank statement

Answer

Purchase order, budget approval, and check

Answer

Invoice, contract, and purchase order

Question 3

What term describes the accounting method where revenue is recorded when earned and expenses when incurred, regardless of cash movement?

Accepted Answer

Accrual basis accounting

Answer

Cash basis accounting

Answer

Modified cash accounting

Answer

Hybrid accounting

Question 4

When preparing a departmental budget, which type of budget starts from zero each cycle and requires justification for every expense?

Accepted Answer

Zero-based budget

Answer

Incremental budget

Answer

Rolling budget

Answer

Flexible budget

Question 5

A petty cash fund is established with $200. After several small purchases, the fund holds $47 in cash and $153 in receipts. The fund is:

Accepted Answer

In balance

Answer

Over by $153

Answer

Short by $153

Answer

Over by $47

Question 6

Which of the following is the correct formula for calculating a budget variance?

Accepted Answer

Actual amount − Budgeted amount

Answer

Actual amount ÷ Budgeted amount

Answer

Budgeted amount × Actual amount

Answer

Budgeted amount ÷ Actual amount