CPS CPS 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

An income statement (profit and loss statement) summarizes revenues and expenses to show net income over a reporting period.

Question 2

What is petty cash typically used for in an office setting?

Accepted Answer

Covering small, miscellaneous office expenses

Answer

Petty cash is a small, on-hand cash fund used to reimburse minor expenses such as postage or office supplies without cutting a formal check.

Question 3

When reconciling a bank statement, what does an 'outstanding check' refer to?

Accepted Answer

A check issued but not yet cleared by the bank

Answer

An outstanding check has been written and recorded in the company's books but has not yet been processed and cleared by the bank.

Question 4

Which term describes the process of comparing internal financial records to an external statement to ensure they match?

Accepted Answer

Reconciliation

Answer

Reconciliation is the process of ensuring that two sets of records (such as a company ledger and a bank statement) agree and are consistent.

Question 5

An accounts payable function primarily involves managing:

Accepted Answer

Money the company owes to its vendors and suppliers

Answer

Accounts payable refers to the short-term liabilities a company owes to its creditors and suppliers for goods or services received.

CPS - Certified Professional Secretary Practice Test