Question

1) What responsibility do treasury professionals typically have in regards to budgets?

a. Treasury professionals use budgets primarily for planning and variance analysis.

b. Treasury professionals need to assess the impact budgets have on debt covenants but not credit ratings.

c. Treasury professionals use budgets as an input to their work but are not responsible for the budgeting process.

d. Budgets may require treasury professionals to change how they handle short-term assets to maintain overall liquidity.

Answer 1

The correct answer of the question is mentioned below :

Answer is "C" - Treasury professional use budgets as an input to their work but are not responsible for the budgeting process.

Reason for the correct answer is because the core responsibility of the treasury professionals is to manage the funds and move funds between the different accounts as per the requirements of the company and they just used as input for the payments and transfers.

A option is incorrect because the planning and variance analysis is done by the other department of the organization hence not a right answer.

B option is also incorrect because the the impact of the budgets on the debt is not the responsibility of the treasury professionals but the responsibility of the top level management.

D option is all the way incorrect because the treasury professionals are nothing to do with the short term assets management for the liquidity purpose , they only require funds for the payment and movement in another accounts of company ,in any case if they are are short of funds then they can do nothing with short term assets.