EAC EAC Financial Administration & Budget Management 1 — Questions and Answers
Question 1: What is the primary responsibility of an executive assistant when managing petty cash for an office?
- Invest it in short-term securities
- Track all disbursements with receipts and reconcile the fund regularly (Correct answer)
- Combine it with the executive's personal funds
- Deposit it into the executive's personal bank account
Correct answer: Track all disbursements with receipts and reconcile the fund regularly
Proper petty cash management requires recording every expenditure with a receipt and performing regular reconciliations to ensure accountability and accuracy.
Question 2: An executive assistant is asked to process an expense report. What is the most important step before submitting it for reimbursement?
- Estimate costs without supporting documents
- Verify all expenses have original receipts and comply with the company's expense policy (Correct answer)
- Round up all figures to the nearest hundred
- Submit it without executive review to save time
Correct answer: Verify all expenses have original receipts and comply with the company's expense policy
Verifying receipts and policy compliance before submission ensures accurate reimbursement and prevents audit issues or policy violations.
Question 3: When assisting in preparing a departmental budget, which approach is considered best practice?
- Copy last year's budget numbers without review
- Analyze historical spending, forecast needs, and align with strategic priorities (Correct answer)
- Base the budget solely on the executive's preferences
- Ignore capital expenditure requests
Correct answer: Analyze historical spending, forecast needs, and align with strategic priorities
Effective budget preparation combines historical data analysis, forward-looking forecasting, and alignment with organizational goals to create a realistic financial plan.
Question 4: What does a 'variance report' in budget management measure?
- Employee attendance fluctuations
- The difference between budgeted amounts and actual spending (Correct answer)
- Differences in office temperatures across floors
- Changes in vendor contract terms
Correct answer: The difference between budgeted amounts and actual spending
A variance report compares planned budget figures against actual expenditures to identify overspending or underspending and prompt corrective action.
Question 5: An executive assistant is asked to reconcile a vendor invoice against a purchase order. What is the main purpose of this process?
- To negotiate a lower invoice price after the fact
- To confirm that goods or services received match what was ordered and billed (Correct answer)
- To delay payment as long as possible
- To process the payment without management approval
Correct answer: To confirm that goods or services received match what was ordered and billed
Three-way matching of invoice, purchase order, and receiving documents ensures the company only pays for what was actually ordered and delivered.
Question 6: Which financial concept describes spreading the cost of a major purchase (like office equipment) over several years rather than expensing it all at once?
- Cash flow management
- Depreciation (Correct answer)
- Payroll processing
- Accounts receivable
Correct answer: Depreciation
Depreciation allocates the cost of a long-term asset over its useful life, matching the expense to the periods in which the asset provides economic benefit.
EAC EAC Financial Administration & Budget Management 1
What is the primary responsibility of an executive assistant when managing petty cash for an office?