Financial Management and Budgeting Flashcards
6 cards from real CAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Financial Management and Budgeting flashcards as text
What is the primary purpose of an internal audit in an organization?
Answer: To independently assess internal controls, compliance, and risk management
Internal audits evaluate the effectiveness of internal controls, risk management, and compliance with policies and regulations.
A budget that is updated monthly by adding a new future period as each current period ends is called a:
Answer: Rolling (continuous) budget
A rolling budget continuously extends the planning horizon by adding a new period as each completed period drops off.
Which principle requires that expenses be recorded in the same period as the revenue they helped generate?
Answer: Matching principle
The matching principle requires expenses to be recognized in the same accounting period as the revenues they generated.
An administrative professional discovers a duplicate vendor invoice has been paid. What is the correct course of action?
Answer: Notify the accounts payable manager and request a refund or credit from the vendor
Duplicate payments must be reported to accounts payable immediately so a vendor refund or credit can be pursued.
What does ROI stand for, and how is it calculated?
Answer: Return on Investment — (net benefit / cost of investment) × 100
ROI (Return on Investment) measures profitability as a percentage: (net benefit ÷ cost of investment) × 100.
Which document lists all ledger account balances and is prepared to verify that total debits equal total credits?
Answer: Trial balance
A trial balance lists all general ledger accounts and their balances to verify that debits equal credits at period end.