Practice Test Geeks(CAM) Certified Account Manager Practice Test
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Financial Management & Budgeting Flashcards

7 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management & Budgeting flashcards as text

  1. A Certified Account Manager must present a budget proposal to leadership. Which element is MOST critical to include for credibility?

    Answer: Assumptions and data sources underlying each key projection

    Documenting assumptions and sources allows stakeholders to evaluate and validate the logic behind projections.

  2. Which financial ratio measures how efficiently a company uses its assets to generate revenue?

    Answer: Asset turnover ratio

    Asset turnover = Revenue ÷ Total Assets, measuring how effectively assets are deployed to generate sales.

  3. An account manager finds that a project's actual labor costs are 20% over budget due to underestimated hours. This is an example of:

    Answer: A quantity (efficiency) variance

    A quantity variance arises when more resources (hours) are consumed than planned, regardless of the rate paid.

  4. When a client negotiates extended payment terms from Net 30 to Net 60, what is the primary financial implication for the account manager's company?

    Answer: Increased Days Sales Outstanding and potential cash flow strain

    Extending payment terms delays cash collection, increasing DSO and putting pressure on the seller's working capital.

  5. A client's budget uses a 10% discount rate to evaluate future cash flows. This discount rate primarily reflects:

    Answer: The cost of capital and risk associated with the investment

    The discount rate represents the required rate of return, incorporating the cost of capital and investment risk.

  6. Which budget type automatically adjusts cost targets based on actual volume achieved, making variance analysis more meaningful?

    Answer: Flexible budget

    A flexible budget recalculates expected costs at the actual activity level, isolating true efficiency variances.

  7. An account manager proposes a $200,000 capital investment. Finance requires a minimum IRR of 12%. The project's IRR is 10%. What is the recommendation?

    Answer: Reject the project because it does not meet the required rate of return

    When a project's IRR falls below the required hurdle rate, it destroys value and should not be approved as proposed.