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Free Questions › CTP › Treasury Technology and Payment Systems
Free CTP Treasury Technology and Payment Systems Practice Questions & Answers
150 exam-style Treasury Technology and Payment Systems questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 61
A treasury team notices that bank statement data imports into the TMS but does not auto-match to open items during reconciliation. The most likely improvement is to:
Select an option first.
Correct answer: D — Enhance the auto-reconciliation matching rules and standardize remittance reference data
Explanation: Auto-matching depends on consistent, structured reference data (such as invoice numbers in remittance fields) and well-configured matching rules within the TMS. Improving those rules and standardizing remittance information increases straight-through reconciliation rates. Stopping imports, reverting to checks, or deleting open items would not solve the matching problem and would harm operations.
Question 62
In a TMS, what does a cash pooling module primarily enable a treasurer to do?
Select an option first.
Correct answer: A — Concentrate balances across multiple accounts to optimize interest and reduce borrowing
Explanation: A cash pooling module supports physical concentration (zero-balance or target-balance sweeps) or notional pooling to aggregate balances across accounts, minimizing idle cash, reducing external borrowing, and optimizing interest. It is a liquidity optimization tool, not a tax, logistics, or marketing function.
Question 63
The EDI 823 transaction set (lockbox) is primarily used to:
Select an option first.
Correct answer: D — Report lockbox deposit and remittance detail from a bank to a company
Explanation: The EDI 823 (lockbox) transaction set is used by a bank to report lockbox activity, including deposit and remittance detail, back to the company for reconciliation and posting. It is not for purchase orders, message encryption, or initiating wire transfers.
Question 64
A key advantage of migrating cross-border payment messaging from MT to ISO 20022 MX format is:
Select an option first.
Correct answer: A — Richer, more structured data that improves straight-through processing and reconciliation
Explanation: ISO 20022 MX messages support significantly richer and more structured data than legacy MT messages, which improves automation, compliance screening, and reconciliation through better straight-through processing. It does not reduce remittance capacity, eliminate the need for institution identifiers, or by itself guarantee instant settlement, which depends on the underlying rail.
Question 65
A treasurer reviewing SWIFT connectivity options learns that SWIFT for corporates can be accessed indirectly through a service bureau. The main reason a corporation would use a service bureau is to:
Select an option first.
Correct answer: B — Avoid the operational burden and cost of maintaining direct SWIFT infrastructure in-house
Explanation: A SWIFT service bureau provides the technical infrastructure and connectivity on behalf of the corporation, reducing the in-house cost, staffing, and operational burden of maintaining a direct SWIFT connection. It does not bypass compliance obligations, enable currency printing, or remove the need for bank accounts.
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Question 66
A treasury team wants to limit the damage from a ransomware attack that encrypts production systems. The most effective preparedness control is:
Select an option first.
Correct answer: D — Maintaining tested, isolated (offline or immutable) backups with a recovery plan
Explanation: Regularly tested, isolated backups that ransomware cannot reach or alter allow an organization to restore systems without paying a ransom, and a documented recovery plan speeds resumption. Keeping the only copy on the production server, disabling defenses, or paying attackers all increase exposure rather than reduce it.
Question 67
Which statement best distinguishes tokenization from encryption?
Select an option first.
Correct answer: A — Tokenization substitutes data with an unrelated surrogate value stored in a secure vault, while encryption mathematically transforms data using a key
Explanation: Tokenization replaces sensitive data with a surrogate token that has no mathematical relationship to the original, with the mapping held in a secure token vault, whereas encryption uses a reversible algorithm and key to transform the data itself. They are complementary techniques. Encryption does protect data in transit, and tokenization does not publish original data.
Question 68
A treasury team is evaluating a new cloud-based TMS vendor. Which due-diligence item best addresses the vendor's own security posture?
Select an option first.
Correct answer: A — Independent security attestations such as SOC 2 reports and data-handling controls
Explanation: Independent security attestations, such as SOC 2 Type II reports, along with documented encryption, access, and data-handling controls, provide evidence of a cloud vendor's security posture and control effectiveness. Interface aesthetics, marketing awards, and conference sponsorships do not demonstrate security assurance.
Question 69
After an employee with payment-release authority resigns, the most important immediate security action is to:
Select an option first.
Correct answer: B — Promptly deactivate the employee's system credentials and access tokens
Explanation: Deprovisioning access promptly upon termination prevents misuse of the former employee's credentials, which is a significant fraud and insider-threat risk, especially for someone with payment authority. Waiting for the next review or reusing credentials leaves a dangerous window open, and public posting adds no protection.
Question 70
Which configuration weakness would most undermine segregation of duties in a payment workflow?
Select an option first.
Correct answer: C — Allowing the same user ID to both create and release payments
Explanation: Permitting a single user to both create and release a payment collapses the maker-checker separation, enabling one person to originate and authorize fraudulent payments without oversight. Requiring two approvers, logging activity, and separating beneficiary changes all strengthen controls rather than weaken them.
Question 71
A company integrates a bank API into its TMS. Which practice best protects the API credentials and connection?
Select an option first.
Correct answer: D — Storing secrets in a secure vault, rotating keys, and restricting by IP and scope
Explanation: API credentials should be stored in a secure secrets vault, rotated regularly, and constrained by least-privilege scopes and network restrictions such as IP allow-listing, with encrypted transport. Hard-coding keys in shared files, emailing them broadly, or disabling TLS all expose the credentials and connection to compromise.
Question 72
A company operating in many countries wants a single standardized channel to connect to multiple banks for both payments and reporting, rather than maintaining separate proprietary links to each bank. The best solution is:
Select an option first.
Correct answer: D — SWIFT connectivity (for example via SWIFT for corporates or a service bureau)
Explanation: SWIFT connectivity gives a corporation a single, standardized, secure channel to reach many banks worldwide for both payment initiation and reporting, avoiding a patchwork of proprietary bank-specific links. Fax lines, separate portal logins, and mailed instructions do not provide a single standardized multi-bank channel.
Question 73
A treasurer finds that some banks deliver BAI2 files while others send MT940 and ISO 20022 camt statements. To achieve consistent cash positioning, the TMS must:
Select an option first.
Correct answer: A — Normalize and map the different reporting formats into a common internal data model
Explanation: When banks deliver data in different formats (BAI2, MT940, ISO 20022 camt), the TMS must parse, normalize, and map them into a consistent internal data model so positioning and reconciliation work uniformly across banks. Rejecting formats, forcing paper, or halting imports would leave the cash position incomplete.
Question 74
Within the ISO 20022 family of cash-management messages, the camt.053 message corresponds most closely to which legacy function?
Select an option first.
Correct answer: B — An end-of-day bank-to-customer statement (like an MT940)
Explanation: The ISO 20022 camt.053 is a bank-to-customer statement message that delivers end-of-day account and transaction reporting, serving the same reporting purpose as the legacy MT940. It is a reporting message, not a payment instruction (MT103), FX confirmation, or trade-finance document.
Question 75
A primary control advantage of implementing eBAM with digitized signatory mandates is:
Select an option first.
Correct answer: C — It creates a consistent audit trail and reduces the risk of outdated or unauthorized signatories
Explanation: Digitized signatory management under eBAM maintains an accurate, centralized, and auditable record of who is authorized on each account, reducing the risk of stale or unauthorized signatories and improving control during audits. It strengthens rather than removes approvals and has no effect on interest rates or unrestricted account opening.
Question 76
When implementing RPA for a treasury reconciliation process, a key governance control is to:
Select an option first.
Correct answer: C — Apply access controls, logging, and exception-handling oversight to the automation
Explanation: RPA bots act with system credentials and must be governed like any privileged user: least-privilege access, activity logging, exception handling, and periodic human oversight of outputs. Unrestricted access, eliminating review, or concealing activity from auditors would create significant control and audit risks.
Question 77
An advantage of using bank APIs over traditional batch file transfers for treasury is that APIs:
Select an option first.
Correct answer: D — Enable real-time, event-driven data exchange and on-demand payment status
Explanation: APIs support real-time, on-demand, and event-driven interactions, allowing a treasury system to query balances or payment status instantly and initiate transactions in real time, unlike scheduled batch files. They are secured with authentication tokens and encryption and do not depend on nightly windows or physical media.
Question 78
A company piloting AI-based cash forecasting should recognize which limitation?
Select an option first.
Correct answer: A — Forecast accuracy depends heavily on data quality, and outputs should be validated and monitored for bias and drift
Explanation: AI-driven forecasting depends heavily on the quality, completeness, and representativeness of input data, and models can degrade over time (drift) or embed bias, so outputs must be validated, explained, and monitored by knowledgeable staff. AI supports but does not replace human understanding of business cash-flow drivers, and it is never guaranteed to be perfectly accurate.
Question 79
A treasury group wants its month-end close to require fewer manual journal entries from treasury activity. The most effective enabler is:
Select an option first.
Correct answer: D — Automated accounting-entry generation and posting from the TMS to the ERP
Explanation: Automating the generation and posting of treasury accounting entries from the TMS to the ERP reduces manual journal entries, accelerates the close, and lowers error rates. Manual re-keying, eliminating bank accounts, or delaying reconciliations would worsen the close process rather than streamline it.
Question 80
A company issues a large volume of recurring consumer collections and wants the lowest per-item cost with predictable settlement, accepting next-day timing. The most cost-effective rail is typically:
Select an option first.
Correct answer: A — ACH debit entries
Explanation: ACH debits are a low-cost, batch-processed rail well suited to high-volume recurring consumer collections where next-day or same-day settlement is acceptable. Wires are far more expensive per item and reserved for high-value, time-critical payments, and mailing checks is slow and costly for recurring collections.
Question 81
A vendor emails treasury requesting that future payments be redirected to a new bank account. The strongest control before updating the payment master data is to:
Select an option first.
Correct answer: B — Independently verify the change with a known contact at the vendor using previously validated contact details
Explanation: Vendor bank-account change requests are a common vector for payment redirection fraud, so the change must be independently verified through a previously validated contact and channel, not the details supplied in the request itself. Updating immediately or confirming within the same suspect thread provides no genuine verification against impersonation.
Question 82
In the context of ISO 20022 adoption on modern payment rails, a benefit especially relevant to emerging real-time payments is:
Select an option first.
Correct answer: C — Structured remittance and extended data that improve reconciliation and enable services like request for payment
Explanation: ISO 20022 provides structured, extended data that travels with each payment, which on real-time rails enables richer remittance information, better automated reconciliation, and value-added services such as request for payment. It increases rather than reduces accompanying data and complements API-based, real-time processing rather than forcing a return to batch.
Question 83
What is the primary purpose of a treasury management system (TMS)?
Select an option first.
Correct answer: A — To centralize and automate treasury activities such as cash positioning, payments, and bank reporting
Explanation: A TMS is a specialized platform designed to centralize and automate core treasury functions including cash positioning, forecasting, payments, bank communications, and debt and investment tracking. It is not an accounting system of record, though it integrates with the ERP or general ledger. Its focus is treasury operations, not sales or inventory management.
Question 84
Straight-through processing (STP) in a treasury environment is best described as:
Select an option first.
Correct answer: B — The end-to-end automated flow of a transaction without manual intervention
Explanation: Straight-through processing refers to the seamless, automated handling of a transaction from initiation through settlement and reconciliation without manual re-keying or intervention. STP reduces errors, lowers costs, and speeds processing. Manual re-keying is precisely what STP is designed to eliminate.
Question 85
Which of the following is typically a core module of a treasury management system?
Select an option first.
Correct answer: C — Cash and liquidity management
Explanation: Cash and liquidity management is a foundational TMS module, supporting cash positioning, forecasting, and bank balance reporting. Other common modules include payments, debt and investments, financial risk management, and bank account management. Payroll, depreciation, and production planning are functions of payroll, accounting, and manufacturing systems, respectively.
Question 86
When an ERP system and a TMS are integrated, what is a key benefit?
Select an option first.
Correct answer: D — Reduced duplicate data entry and improved data consistency across systems
Explanation: Integrating an ERP with a TMS allows shared master data and transaction information to flow between systems, reducing duplicate manual entry and improving data consistency and accuracy. It does not eliminate bank relationships, guarantee investment returns, or remove the need for internal controls, which remain essential.
Question 87
A treasury workstation differs from a full enterprise TMS primarily in that it:
Select an option first.
Correct answer: A — Is generally more limited in scope, focusing on cash management and reporting
Explanation: A treasury workstation typically offers a narrower feature set focused on cash management, positioning, and bank reporting, while a full enterprise TMS provides broader capabilities such as risk management, debt and investments, and multi-entity support. Both connect to banks. Neither is legally mandated for all public companies.
Question 88
Which deployment model allows a company to access its TMS over the internet without hosting the software on its own servers?
Select an option first.
Correct answer: B — Software-as-a-Service (SaaS) / cloud-hosted
Explanation: Software-as-a-Service (SaaS) delivers the TMS through a cloud-hosted, subscription model accessed over the internet, with the vendor managing hosting, maintenance, and upgrades. On-premise installations require the company to host and maintain the software itself. Spreadsheets and mainframe batch systems are not cloud-delivered TMS models.
Question 89
Which U.S. payment system is a real-time gross settlement (RTGS) system operated by the Federal Reserve for large-value, time-critical wire transfers?
Select an option first.
Correct answer: D — Fedwire Funds Service
Explanation: Fedwire Funds Service is the Federal Reserve's real-time gross settlement system, settling large-value wire transfers individually and with finality in real time. ACH is a batch, net settlement system. Check and card networks operate on different, non-RTGS models.
Question 90
CHIPS (Clearing House Interbank Payments System) is best characterized as:
Select an option first.
Correct answer: A — A privately operated large-value payment system that uses netting to settle interbank payments
Explanation: CHIPS is a privately operated (by The Clearing House) large-value payment system that nets payment obligations among participants to conserve liquidity, with final settlement typically at day's end and intraday finality features. It is not a card network, check service, or consumer wallet.
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