Chapter 13 quiz

________ is the practice of trading goods and services without the use of money.

Barter

Money that is immediately available to be spent is called

Cash

________ refers to the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold.

Consignment

________ make up most of the non currency cash which is available immediately.

Demand deposits

________ is a method that employees use to steal cash after it has been received and recorded in the company books.

Embezzlement

________ is a method of borrowing money secured by a firm's accounts receivable.

Factoring

________ represent either ownership or debt of publicly held firms and government issued debt, in the form of bonds, notes, and bills.

Marketable securities

An entity that processes checks and electronic fund transfers for banks and other financial organizations is called

a clearinghouse.

The ________ is the name given to the bank's accounting system for all recognized transactions that affect the account, including deposits, electronic transfers, service fees, and checks presented to the bank for payment.

bank ledger balance

A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave.

cash budget

The ________ is a schedule of the amounts and timings of payments of cash out of a business.

cash disbursements budget

Debt investments that mature in less than three months are an example of

cash equivalents.

Cash that can be obtained from stocks, bonds, land, buildings, or equipment that a business has is called

cash flow from investing.

Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called

cash flow from operations.

A reduction in the bank account of a merchant by a credit card company is termed

charge back.

A(n) ________ refers to the sum of cash inflows and cash outflows recorded in a firm's accounting records.

company book balance

To protect your business from having cash drained by employees, you first must hire honest and ethical people, and secondly,

develop a cash receipts budget.

Every month, David, an assistant at a shoe store, steals money from his employer, after it has been received and recorded in the books, by altering the accounting records in the company book. David's act falls under which of the following categories of theft?

embezzlement

Using methods to appear to be paying bills on time, when in fact the cash outflow is being delayed or avoided is called

gaming the payment process.

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business, are called

noncore projects.

The time required for a business to acquire resources, convert them into a product, sell the product, and receive cash from the sale is referred as the ________ cycle of a business.

operating

Amounts owed to vendors for merchandise or services purchased on credit are called

payables

Maintaining an inventory helps a business to have an optimal level of cash flow by

reducing the cost of processing orders.

Percentage discounts from gross invoice amounts provided to encourage prompt payment are called

trade discounts.

A ________ is a form of money that can be immediately used to make payments.

traveler's check

The most common strategy employed by small businesses for handling money shortages is

using personal money.

Tara's friend Robbie worked at the local coffee shop. Tara always stopped to get her morning coffee from the shop because Robbie would fix her a deluxe coffee but only charge her for a standard cup of coffee. This is an example of

phony disbursements.

For businesses that gross in excess of $10 million per year, pro forma amounts are usually

rounded to the nearest one thousand dollars.

Any debt that must be paid in less than one year from the date of the financial statement on which it is reported is considered

short-term debt.

We use many electronic forms of money: debit cards, online bill payments, electronic bank drafts, wire transfers, even Bitcoin. These forms of money make an important point - the essence of money is that it is a form of

information.