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CA Intermediate · Financial Management and Strategic Management · Treasury and Cash Management

Which of the following is a recognised function of a corporate treasury department, as distinct from the routine accounting function?

Managing the firm's liquidity, funding and foreign exchange exposures is a treasury function. Treasury deals with raising, deploying and protecting funds and managing financial risks, whereas preparing financial statements, computing tax and conducting audits belong to the accounting, tax and independent audit functions.

  1. APreparing the statutory financial statements for the year
  2. BManaging the firm's liquidity, funding and foreign exchange exposuresCorrect
  3. CComputing the income-tax liability of the firm
  4. DConducting the statutory audit of the firm

Explanation

Treasury management concerns managing funds: liquidity, short- and long-term funding, investment of surplus cash and currency or interest rate risk. Preparing financial statements and computing tax are accounting and tax functions, and the statutory audit is carried out by an independent auditor.

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