EAC EAC Financial Administration & Budget Management 2 — Questions and Answers
Question 1: What is the purpose of a 'purchase order (PO)' in a company's procurement process?
- To record past transactions in the general ledger
- To formally authorize a vendor to provide specified goods or services at an agreed price (Correct answer)
- To calculate employee bonuses
- To track petty cash disbursements
Correct answer: To formally authorize a vendor to provide specified goods or services at an agreed price
A purchase order is a formal document that authorizes a vendor transaction, establishes agreed terms, and creates an official record for accounts payable processing.
Question 2: An executive asks their assistant to track travel and entertainment expenses for a quarterly review. Which Excel feature would be most useful for summarizing this data?
- WordArt
- PivotTable (Correct answer)
- Spell Checker
- Page Layout View
Correct answer: PivotTable
PivotTables allow executive assistants to dynamically summarize, sort, and analyze large expense datasets by category, date, or department with ease.
Question 3: What does 'accounts payable' refer to in an organizational context?
- Money owed to the organization by clients
- Money the organization owes to suppliers or vendors for goods and services received (Correct answer)
- Employee salary calculations
- Revenue earned from product sales
Correct answer: Money the organization owes to suppliers or vendors for goods and services received
Accounts payable represents the organization's short-term obligations to vendors and suppliers for goods and services already received but not yet paid.
Question 4: When an executive assistant is given signatory authority on a corporate credit card, what is the most important financial control to maintain?
- Use the card for personal purchases under $50
- Keep every receipt and submit detailed expense reports matching each charge (Correct answer)
- Share the card number with all colleagues for convenience
- Pay only the minimum balance each month
Correct answer: Keep every receipt and submit detailed expense reports matching each charge
Maintaining documentation for every charge and submitting accurate expense reports ensures transparency, compliance, and protection against fraud or policy violations.
Question 5: What is a 'cost center' in corporate budgeting terminology?
- A physical office location's geographic center
- A department or unit that incurs costs but does not directly generate revenue (Correct answer)
- An accounting system that tracks profit margins
- The main office for finance executives
Correct answer: A department or unit that incurs costs but does not directly generate revenue
A cost center is a functional unit within an organization whose expenses are tracked separately for budget management purposes, though it doesn't directly produce revenue.
Question 6: An executive assistant discovers a duplicate invoice from a vendor in the payment queue. What is the correct course of action?
- Pay both invoices to avoid damaging the vendor relationship
- Flag the duplicate to accounts payable or the finance team and hold payment pending resolution (Correct answer)
- Shred the second invoice without notifying anyone
- Approve both payments since the amounts are small
Correct answer: Flag the duplicate to accounts payable or the finance team and hold payment pending resolution
Flagging duplicate invoices to the appropriate finance team prevents overpayment, protects company funds, and maintains accurate financial records.
EAC EAC Financial Administration & Budget Management 2
What is the purpose of a 'purchase order (PO)' in a company's procurement process?