CEFP CHAPTER 1 QUESTIONS WITH
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CORRECT ANSWERS | RATED A+
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1. Capital ghBudgeting gh- ghCORRECT ghANSWER gh-The ghplanning ghand ghinvestment ghfor gha ghfixed
ghasset ghwhen ghthe ghexpenditure ghand ghexpected ghreturn ghextend ghbeyond ghone ghyear.
2. Net ghAsset ghClassifications gh- ghCORRECT ghANSWER gh-"The ghamount ghof ghtotal ghassets
ghminus ghtotal ghliabilities. ghClassified ghdifferently ghdepending ghon ghwhether ghthe
ghinstitution ghis ghpublicly ghor
privately ghfunded. ghFormerly ghknown ghas ghfund ghaccounting."
3. Chart ghof ghAccounts gh- ghCORRECT ghANSWER gh-A ghlisting ghof ghthe ghaccounts ghused ghby ghan
ghinstitution ghto ghdefine gheach ghclass ghof ghitems ghfor ghwhich ghmoney ghor ghthe ghequivalent ghis
ghspent ghor ghreceived.
4. Organizational ghTeams gh- ghCORRECT ghANSWER gh-Teams ghwho ghkeep ghthe ghexisting
ghorganizational ghstructure ghalmost ghintact.
5. Payback ghMethod gh- ghCORRECT ghANSWER gh-The ghnumber ghof ghyears ghover ghwhich ghthe ghinitial
ghcapital ghoutlay ghwill ghbe ghrecovered.
6. Risk ghAssessment gh- ghCORRECT ghANSWER gh-Identification ghand ghanalysis ghof ghpotential
ghloss ghand ghliability ghin ghkey ghprocesses, ghsuch ghas ghaccounts ghreceivable, ghaccounts
ghpayable, ghpayroll, ghprocurement, ghand ghtechnology ghchanges.
7. Credits gh- ghCORRECT ghANSWER gh-An ghentry ghin ghthe ghright ghhand ghcolumn ghof ghan
ghaccount ghthat ghincreases ghliability, ghincome, ghand ghequity ghaccounts ghand
ghdecreases ghasset ghand ghexpense ghaccounts.
8. Specialty ghTerms gh- ghCORRECT ghANSWER gh-Teams ghwho ghcross ghorganizational
ghboundaries ghto ghinvolve gha ghdiverse ghcombination ghof ghindividuals ghwho ghthen ghaddress
gha ghspecific ghproblem ghor ghissue.
, 9. Short-term ghDebt ghFinancing gh- ghCORRECT ghANSWER gh-"Financing ghfor ghtemporary
ghinvestments. ghSources ghinclude ghthe ghcost ghof ghcredit, ghavailability ghof ghcredit, ghand ghthe
ghinfluence ghof gha ghparticular ghcredit ghon ghthe ghavailability ghand ghcost ghof ghother ghsources."
10. Control ghEnvironment gh- ghCORRECT ghANSWER gh-Sets ghthe ghtone ghof ghthe ghorganization,
ghinfluencing ghthe ghconsciousness ghof gheveryone ghand ghproviding ghdiscipline ghand
ghstructure gh(i.e., ghsuch ghas ghhaving gha ghcode ghof ghconduct, ghcode ghof ghethics, ghand ghconflict
ghof ghinterest ghstatements ghfor ghthe ghorganization).
11. Debits gh- ghCORRECT ghANSWER gh-An ghentry ghin ghthe ghleft ghhand ghcolumn ghof ghan
ghaccount ghthat ghincreases ghasset ghand ghexpense ghaccounts ghand ghdecreases ghliability,
ghincome ghand ghequity ghaccounts.
12. Cash-Basis ghAccounting gh- ghCORRECT ghANSWER gh-Transactions ghare ghrecorded ghonly ghwhen
ghcash ghcomes ghinto ghor ghgoes ghout ghof ghthe ghorganization.
13. Probability gh- ghCORRECT ghANSWER gh-A ghrisk ghis ghan ghevent ghthat gh"may" ghoccur. ghThe
ghprobability ghof ghit ghoccurring ghcan ghrange ghanywhere ghfrom ghjust ghabove gh0 gh% ghto ghjust
ghbelow gh100%.
14. Economic ghOrder ghQuantity gh(EOQ) gh- ghCORRECT ghANSWER gh-Determining ghthe ghorder
ghquantity ghthat ghminimizes ghthe ghtotal ghinventory ghholding ghcosts ghand ghordering ghcosts.
15. Actual ghvs. ghBudget ghComparison gh- ghCORRECT ghANSWER gh-"Comparison ghof ghactual
ghcosts ghto ghbudget ghis ghgenerally ghsuperior ghto ghcomparisons ghagainst ghpast ghperformance.
ghWhen ghproperly ghprepared, ghbudgets ghrepresent ghthe ghplan, ghstated ghin ghmonetary
ghterms, ghwhich ghhas ghbeen
formulated ghto ghmeet ghthe ghobjectives ghof ghthe ghorganization."
16. Exception ghAnalysis gh- ghCORRECT ghANSWER gh-"Attention ghis ghfocused ghon ghthe ghrelatively
ghsmall ghnumber ghof ghitems ghfor ghwhich ghactual ghperformance ghis ghsignificantly
ghdifferent ghfrom ghthe ghstandard."
gh gh gh gh
CORRECT ANSWERS | RATED A+
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1. Capital ghBudgeting gh- ghCORRECT ghANSWER gh-The ghplanning ghand ghinvestment ghfor gha ghfixed
ghasset ghwhen ghthe ghexpenditure ghand ghexpected ghreturn ghextend ghbeyond ghone ghyear.
2. Net ghAsset ghClassifications gh- ghCORRECT ghANSWER gh-"The ghamount ghof ghtotal ghassets
ghminus ghtotal ghliabilities. ghClassified ghdifferently ghdepending ghon ghwhether ghthe
ghinstitution ghis ghpublicly ghor
privately ghfunded. ghFormerly ghknown ghas ghfund ghaccounting."
3. Chart ghof ghAccounts gh- ghCORRECT ghANSWER gh-A ghlisting ghof ghthe ghaccounts ghused ghby ghan
ghinstitution ghto ghdefine gheach ghclass ghof ghitems ghfor ghwhich ghmoney ghor ghthe ghequivalent ghis
ghspent ghor ghreceived.
4. Organizational ghTeams gh- ghCORRECT ghANSWER gh-Teams ghwho ghkeep ghthe ghexisting
ghorganizational ghstructure ghalmost ghintact.
5. Payback ghMethod gh- ghCORRECT ghANSWER gh-The ghnumber ghof ghyears ghover ghwhich ghthe ghinitial
ghcapital ghoutlay ghwill ghbe ghrecovered.
6. Risk ghAssessment gh- ghCORRECT ghANSWER gh-Identification ghand ghanalysis ghof ghpotential
ghloss ghand ghliability ghin ghkey ghprocesses, ghsuch ghas ghaccounts ghreceivable, ghaccounts
ghpayable, ghpayroll, ghprocurement, ghand ghtechnology ghchanges.
7. Credits gh- ghCORRECT ghANSWER gh-An ghentry ghin ghthe ghright ghhand ghcolumn ghof ghan
ghaccount ghthat ghincreases ghliability, ghincome, ghand ghequity ghaccounts ghand
ghdecreases ghasset ghand ghexpense ghaccounts.
8. Specialty ghTerms gh- ghCORRECT ghANSWER gh-Teams ghwho ghcross ghorganizational
ghboundaries ghto ghinvolve gha ghdiverse ghcombination ghof ghindividuals ghwho ghthen ghaddress
gha ghspecific ghproblem ghor ghissue.
, 9. Short-term ghDebt ghFinancing gh- ghCORRECT ghANSWER gh-"Financing ghfor ghtemporary
ghinvestments. ghSources ghinclude ghthe ghcost ghof ghcredit, ghavailability ghof ghcredit, ghand ghthe
ghinfluence ghof gha ghparticular ghcredit ghon ghthe ghavailability ghand ghcost ghof ghother ghsources."
10. Control ghEnvironment gh- ghCORRECT ghANSWER gh-Sets ghthe ghtone ghof ghthe ghorganization,
ghinfluencing ghthe ghconsciousness ghof gheveryone ghand ghproviding ghdiscipline ghand
ghstructure gh(i.e., ghsuch ghas ghhaving gha ghcode ghof ghconduct, ghcode ghof ghethics, ghand ghconflict
ghof ghinterest ghstatements ghfor ghthe ghorganization).
11. Debits gh- ghCORRECT ghANSWER gh-An ghentry ghin ghthe ghleft ghhand ghcolumn ghof ghan
ghaccount ghthat ghincreases ghasset ghand ghexpense ghaccounts ghand ghdecreases ghliability,
ghincome ghand ghequity ghaccounts.
12. Cash-Basis ghAccounting gh- ghCORRECT ghANSWER gh-Transactions ghare ghrecorded ghonly ghwhen
ghcash ghcomes ghinto ghor ghgoes ghout ghof ghthe ghorganization.
13. Probability gh- ghCORRECT ghANSWER gh-A ghrisk ghis ghan ghevent ghthat gh"may" ghoccur. ghThe
ghprobability ghof ghit ghoccurring ghcan ghrange ghanywhere ghfrom ghjust ghabove gh0 gh% ghto ghjust
ghbelow gh100%.
14. Economic ghOrder ghQuantity gh(EOQ) gh- ghCORRECT ghANSWER gh-Determining ghthe ghorder
ghquantity ghthat ghminimizes ghthe ghtotal ghinventory ghholding ghcosts ghand ghordering ghcosts.
15. Actual ghvs. ghBudget ghComparison gh- ghCORRECT ghANSWER gh-"Comparison ghof ghactual
ghcosts ghto ghbudget ghis ghgenerally ghsuperior ghto ghcomparisons ghagainst ghpast ghperformance.
ghWhen ghproperly ghprepared, ghbudgets ghrepresent ghthe ghplan, ghstated ghin ghmonetary
ghterms, ghwhich ghhas ghbeen
formulated ghto ghmeet ghthe ghobjectives ghof ghthe ghorganization."
16. Exception ghAnalysis gh- ghCORRECT ghANSWER gh-"Attention ghis ghfocused ghon ghthe ghrelatively
ghsmall ghnumber ghof ghitems ghfor ghwhich ghactual ghperformance ghis ghsignificantly
ghdifferent ghfrom ghthe ghstandard."
