Part 1: Introduction to Treasury Management Certification Review Exam Questions With Multiple Choices And Correct Answers.

Treasury Management - correct answer Involves daily liquidity and risk management tasks that ensure the availability of adequate cash resources needed to sustain ongoing operations & overall strategic objectives Which is an expected result of proper long-term treasury management? - correct answer Funds and information are available to sustain the organization's initiatives Credit Manager - correct answer Responsible for preserving and collecting accounts receivable Which is a typical result of a multinational operating a centralized treasury instead of a decentralized one? - correct answer Better economies of scale Controller - correct answer Primary function is financial reporting and compliance Risk Manager - correct answer May evalaute and negotiate insurance policies and coverage levels, as well as oversee disaster recovery and business continuity planning Investor Relations Manager - correct answer Provides access to annual reports, managers regular investor briefings and answers questions that current or potential investors may have regarding the company 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 (IT), human resources (HR), or accounts payable (A/P) 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. Chief Financial Officer (CFO) - correct answer Responsible for the financial management of an organization which includes treasury and accounting functions. Personally responsible for accuracy and completeness of financial statements & adequate internal financial controls. Treasurer - correct answer Implements treasury policy and procedures, oversees daily liquidity and cash management, short & long-term investing and financing, manages financial risks, relationships with banks/financial institutions and other providers, and domestic & international payments Assistant Treasurer or Manager/Director of Treasury Operations - correct answer Generally responsible for treasury's daily operations, enabling the treasurer to focus on strategic issues Cash Manager - correct answer Directs daily cash management operations (i.e. cash administration, management of bank accounts, and bank relations Foreign Exchange Manager - correct answer Responsible for executing daily foreign exchange transactions Financial Planning and Analysis Manager - correct answer Responsible for forecasting and interpreting financial information to provide insight to the board and company management to support financial decision making. Investment Manager - correct answer Responsible for investing longer-term retained cash and/or managing the coporate pension fund Internal Auditor - correct answer Manages the internal audit function to ensure that controls and operating procedures are established to protect the company from losses caused by inefficiecy, inaccuracy, or fraud. Accounts Payable Manager - correct answer Ensures that payments are made to vendors and suppliers in a manner that is consistent with credit terms. Investor Relations Manager/Officer - correct answer Ensures that both shareholders and bondholders receive up-to-date information on the company and provides access to annual reports, manages regular investor briefings, and answers questions that current or potential investors may have regarding the company. Maintain Liquidity (Objective) - correct answer Ensure the ability to meet current & future financial obligations in a timely and cost effective manner Optimize Cash Resources (Objective) - correct answer Manage operational cash balances while providing adequate liquidity, invest excess cash balances to protect principle and generate interest income, if possible, or use excess cash balances to pay down debt in order to reduce interest expense. Maintain Access to Short-Term Financing (Objective) - correct answer Commonly used to finance invest