CTP Exam Definitions questions with
answers 2026/2027
charge-back - Correct answer✅✅ The reversal of a prior outbound transfer of funds
from a consumer's bank account, line of credit, or
credit card.
capital - Correct answer✅✅ The more permanent sources of funds used by a company, such as long-
term debt, preferred stock, and common equity.
Disaster Recovery - Correct answer✅✅ The restoration of systems and communications after an event
causes an outage.
economies of scale - Correct answer✅✅ A relationship that occurs when an increase in sales lowers
the average cost per unit sold.
financial planning - Correct answer✅✅ An organizational function that involves determining
the need for present and future funding to support
operations. An important part of this function is
the forecasting of revenues, income, and external
financing required to support the company's planned
growth.
financial risk - Correct answer✅✅ The risk that the overall value of an organization may
change in response to a change in interest or foreign
exchange rates.
liquidity - Correct answer✅✅ The ability of an organization to convert assets into
,cash quickly and without a significant risk of loss.
operating cycle - Correct answer✅✅ A representation of the flow of funds through a
company from the acquisition of raw materials,
through the production cycle and the sale of
products or services, and finally to the collection of
payments from customers.
shared services center (SSC) - Correct answer✅✅ A department or operation within a multiunit
organization tasked with supplying multiple business
units and their respective divisions and departments
with specialized services, such as information
technology, human resources, or accounts payable
services.
working capital - Correct answer✅✅ The sum of a company's current asset accounts
(primarily cash, accounts receivable, and inventory)
less the sum of its current liability accounts (primarily
payables and accrual accounts). Also known as net
working capital.
working capital gap - Correct answer✅✅ The time gap between a cash outflow and a cash
inflow.
balance sheet - Correct answer✅✅ A financial statement that reports a company's
financial condition—including assets, liabilities, and
stockholders' equity—at a point in time.
bank capital requirements - Correct answer✅✅ Rules or regulations that specify the amount of
, funds the owners of a bank must contribute to the
business.
Bank Secrecy Act of 1970 (BSA) - Correct answer✅✅ A US legislative act under which US banks (and,
in many cases, companies and individuals) are
required to perform due diligence by determining a
customer's identity and monitoring transactions for
suspicious activity.
capital adequacy - Correct answer✅✅ A factor that measures whether the amount of more
permanent sources of funds maintained relative
to the nature and extent of an institution's risks is
sufficient given management's ability to identify,
measure, monitor, and control these risks.
capital tax - Correct answer✅✅ A type of levy assessed by some countries
(particularly those experiencing an upsurge in
economic growth) on multinational companies that
are headquartered in another country.
central bank - Correct answer✅✅ An entity that is responsible for implementing and
managing a country's monetary policy—in other
words, the country's money supply and interest rates.
Check Clearing for the 21st Century
Act of 2003 (Check 21) - Correct answer✅✅ A US law that provided the basis for electronic
clearing of checks by allowing the substitution of a
copy or image of a check for the original document
in the clearing process.
answers 2026/2027
charge-back - Correct answer✅✅ The reversal of a prior outbound transfer of funds
from a consumer's bank account, line of credit, or
credit card.
capital - Correct answer✅✅ The more permanent sources of funds used by a company, such as long-
term debt, preferred stock, and common equity.
Disaster Recovery - Correct answer✅✅ The restoration of systems and communications after an event
causes an outage.
economies of scale - Correct answer✅✅ A relationship that occurs when an increase in sales lowers
the average cost per unit sold.
financial planning - Correct answer✅✅ An organizational function that involves determining
the need for present and future funding to support
operations. An important part of this function is
the forecasting of revenues, income, and external
financing required to support the company's planned
growth.
financial risk - Correct answer✅✅ The risk that the overall value of an organization may
change in response to a change in interest or foreign
exchange rates.
liquidity - Correct answer✅✅ The ability of an organization to convert assets into
,cash quickly and without a significant risk of loss.
operating cycle - Correct answer✅✅ A representation of the flow of funds through a
company from the acquisition of raw materials,
through the production cycle and the sale of
products or services, and finally to the collection of
payments from customers.
shared services center (SSC) - Correct answer✅✅ A department or operation within a multiunit
organization tasked with supplying multiple business
units and their respective divisions and departments
with specialized services, such as information
technology, human resources, or accounts payable
services.
working capital - Correct answer✅✅ The sum of a company's current asset accounts
(primarily cash, accounts receivable, and inventory)
less the sum of its current liability accounts (primarily
payables and accrual accounts). Also known as net
working capital.
working capital gap - Correct answer✅✅ The time gap between a cash outflow and a cash
inflow.
balance sheet - Correct answer✅✅ A financial statement that reports a company's
financial condition—including assets, liabilities, and
stockholders' equity—at a point in time.
bank capital requirements - Correct answer✅✅ Rules or regulations that specify the amount of
, funds the owners of a bank must contribute to the
business.
Bank Secrecy Act of 1970 (BSA) - Correct answer✅✅ A US legislative act under which US banks (and,
in many cases, companies and individuals) are
required to perform due diligence by determining a
customer's identity and monitoring transactions for
suspicious activity.
capital adequacy - Correct answer✅✅ A factor that measures whether the amount of more
permanent sources of funds maintained relative
to the nature and extent of an institution's risks is
sufficient given management's ability to identify,
measure, monitor, and control these risks.
capital tax - Correct answer✅✅ A type of levy assessed by some countries
(particularly those experiencing an upsurge in
economic growth) on multinational companies that
are headquartered in another country.
central bank - Correct answer✅✅ An entity that is responsible for implementing and
managing a country's monetary policy—in other
words, the country's money supply and interest rates.
Check Clearing for the 21st Century
Act of 2003 (Check 21) - Correct answer✅✅ A US law that provided the basis for electronic
clearing of checks by allowing the substitution of a
copy or image of a check for the original document
in the clearing process.
