ETR401 - Chapter 14

A

A negative balance in a depositor's bank account is referred to as: A. overdraft. B. float. C. ledger balance. D. reconciling.

D

A reduction in the bank account of a merchant by a credit card company refers to: A. reconciling. B. liquidity. C. overdrafting. D. charge back.

A

Accepting payments by credit card causes significant differences between the bank and book balances due to all of the following reasons EXCEPT: A. the service provider records the gross amount of each credit card sale. B. the service provider takes up to three working days to actually make the deposit to your account. C. the credit card service provider deposits to your account the sale amount less the credit card service fee. D. credit card clearing services also will reduce the amount deposited in the event of fraud.

B

All of the following provides savings in cash outflows EXCEPT: A. trade discounts. B. taking on noncore paying projects. C. barter. D. use of temporary agencies.

C

Amounts owed to vendors for merchandise or services purchased on credit is called: A. receivables. B. demand deposits. C. payables. D. charge back.

A

Amounts that are owed to a business for merchandise that was sold on credit refers to: A. receivables. B. demand deposits. C. payables. D. charge back.

A

Approximately 55 percent of small businesses that fail do so because of: A. cash flow problems with an immediate impact. B. lack of profitability. C. missing the mark on product demand. D. sour banking relationships.

B

As Tammy always ended up writing more checks than the money she had in her checking account, her son recommended that she establish with her bank to _____ her account so that her checks could be paid. A. partial close B. overdraft C. demand deposit D. float

A

Assets that may be quickly converted to cash is called: A. cash equivalent. B. inventory. C. receivables. D. payables.

B

Cash can come from all of these sources for a small business EXCEPT: A. cash flow from subsidy. B. cash flow from operations. C. cash flow from investing. D. cash from financing.

B

Cash is composed of all of these forms of money that can be immediately used to make payments EXCEPT: A. currency. B. receivables. C. demand deposits. D. traveler's checks.

C

Cash payments received before product is completed or delivered is called: A. noncore payments. B. payables. C. deposits and progress payments. D. discounted payments.

B

Delays in the movement of money among depositors and banks is referred to as: A. overdraft. B. float. C. ledger balance. D. reconciling.

A

Delays in transferring money among banks due to internal procedures is referred to as: A. availability float. B. overdrafting. C. processing float. D. reconciling.

A

Every business that maintains inventory has an optimal level that minimizes the total cost of all of the following EXCEPT: A. frequent purchases. B. carrying inventory. C. processing orders. D. losing sales due to being out of stock.

A

For small businesses, the key budget is the _____ budget. A. cash B. retained earnings C. sales D. marketing

A

Identify the budget that is a schedule of the amounts and timings of payments of cash out of a business. A. Cash disbursements budget B. Comprehensive budget C. Cash receipts budget D. Cash budget

A

In _____ you may trade similar items without creating a taxable transaction. A. bartering B. consignment C. noncash incentives D. cash-to-cash cycle

C

Information that the bank knows about your account that you do not know includes all of these EXCEPT: A. the amount of service charges taken from your account. B. the amount of any direct payments made to your account by your customers. C. the deposits you have made after bank closing. D. the amount of any interest received or charged

A

Money held in checking and savings accounts are called: A. demand deposits. B. marketable securities. C. commercial papers. D. receivables.

A

Money in the end is a form of: A. information. B. paper. C. plastic. D. culture.

D

Money that is immediately available to be spent is called: A. profit. B. sales. C. charge back. D. cash.

B

Percentage discounts from gross invoice amounts provided to encourage prompt payment is referred to as: A. core discount. B. trade discount. C. non cash incentives. D. consignment.

A

Revenue-producing tasks and activities related to, but not part of the primary strategy of a business is called: A. noncore projects. B. discontinued tasks. C. factoring receivables. D. off-the-books strategy.

C

Tammy insists that cash for her business can come from all of these sources. Her Son should point out that _____ is not one of the sources for Tammy's cash needs. A. cash flow from operations B. cash from financing C. cash flow from subsidies D. cash flow from investing

D

Tammy needs to know that the time that is required for her to acquire resources, convert them into craft products, sell the products, and receive cash from the sale is called: A. accounts payable cycle. B. reconciling. C. demand deposits timeframe. D. cash-to-cash cycle.

B

The _____ is a schedule of the amounts and timing of the receipt of cash into a business. A. cost of goods sold budget B. cash receipts budget C. sales budget D. payables budget

D

The _____ is the actual cash value of the account. A. bank ledger balance B. company book balance C. clearinghouse D. bank available balance

B

The _____ is the name given to the sum of cash inflows and cash outflows recorded in the firm's accounting records. A. bank ledger balance B. company book balance C. clearing house D. bank available balance

A

The amount owed to vendors from whom Tammy purchased the craft merchandise on credit is called: A. payables. B. demand deposits. C. receivables. D. inventory.

C

The basis to being able to control a business's money is to understand and be able to predict the patterns of cash flows. This is possible by preparing a: A. cash disbursements budget. B. comprehensive budget. C. cash receipts budget. D. cash budget.

A

The bills and coins printed by government to represent money refers to: A. currency. B. receivables. C. demand deposits. D. traveler's checks

C

The difference between revenue and expense is called: A. sales. B. interest. C. profit. D. overhead.

B

The most common noncash incentive(s) is/are: A. autonomy. B. stock options. C. added vacation days. D. compensating time off.

B

The practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold is called: A. bartering. B. consignment. C. noncash incentive. D. reconciling.

A

The practice of trading goods and services without the use of money is called: A. bartering. B. consignment. C. noncash incentive. D. reconciling.

D

The small business owners in the NFIB Foundation poll reported that all of these were causes of cash flow problems EXCEPT: A. difficulty collecting money due from customers. B. seasonal variations in sales. C. unexpected decreases in sales. D. unexpected increases in taxes.

B

The time that is required for a business to acquire resources, convert them into a product, sell the product, and receive cash from the sale refers to: A. seasonal sales. B. cash-to-cash cycle. C. hard-to-soft circle. D. charge back cycle.

B

The two forms of short-term financing are short term debt and: A. cash equivalent. B. commercial paper. C. marketable security. D. demand deposit.

D

There are two primary causes of float: A. book balance float and bank ledger float. B. bank ledger balance and bank available balance. C. reconciling float and charge back float. D. availability float and processing float

B

There are two purposes of money: A. to buy and to accumulate. B. to make exchanges and to keep track of wealth. C. to buy and to sell. D. to save and to accumulate

C

These are also referred to as master budgets. A. Cash disbursements budget B. Cash receipts budget C. Comprehensive budget D. Cash budget

C

To factor your receivables your _____ must have good credit ratings. A. suppliers B. business C. customers D. agents

A

Using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided is called: A. gaming the payment process. B. growth trap. C. charge back. D. cash-to-cash cycle.

C

What is the term used for delays in delivering checks from the writer of the check to the recipient's bank? A. Availability float B. Overdrafting C. Processing float D. Reconciling

D

When a business offers you a discount of 2 percent if you pay the bill in full within 7 days, it is called: A. noncore payments. B. progress payments. C. receivables discount. D. discount for prompt payments.

D

Which of the following is the term used for a financial crisis that is caused by a business growing faster that it can be financed? A. Cash-to-cash cycle B. Gaming the payment process C. Charge back D. Growth trap

D

Which of the following is usually called the cash account? A. Clearinghouse B. Bank available balance C. Bank ledger balance D. Company book balance

D

Which of the following is usually called the cash account? A. Clearinghouse B. Bank available balance C. Bank ledger balance D. Company book balance A bank ledger balance may vary significantly from the actual value of cash that the bank is holding for the depositor because of delays in collecting deposits and delays in making cash transfers.

C

Which of these is NOT a strategy employed by small businesses for handling money shortages? A. Selling receivables B. Adjusting scheduled payments C. Filing for bankruptcy D. Selling investments

B

Which of these is NOT a technique to increase cash inflows? A. Taking deposits and progress payments. B. Foregoing receivables. C. Asking for your money. D. Taking on noncore paying projects.

B

Which of these is the number one strategy employed by small businesses for handling money shortages? A. Borrowing B. Using personal money C. Adjusting scheduled purchases D. Laying off employees

C

Which of these refers to an entity that processes checks and electronic fund transfers for banks and other financial organizations? A. Credit unions B. Thrifts C. Clearinghouse D. Trade unions

B

Which of these refers to the accounting process that identifies the causes of all differences between book and bank balances? A. Overdrafting B. Reconciling C. Charge back

D

Which of these techniques is not one that Tammy can use to increase her cash inflows? A. Taking deposits and progress payments. B. Asking for her money from customers. C. Taking on noncore paying projects. D. Offering discounts for deferred payments.

B

_____ are made up of stocks and bonds for which there is an active auction market. A. Demand deposits B. Marketable securities C. Commercial papers D. Receivables

C

_____ are notes issued by credit-worthy corporations. A. Demand deposits B. Marketable securities C. Commercial papers D. Receivables

A

_____ is a method of borrowing against receivables. A. Factoring B. Noncore project C. Discounted payment D. Reconciling

B

_____ make up most of the non currency cash. A. Marketable securities B. Demand deposits C. Commercial papers D. Receivables

D

_____ must be paid in less than one year from the date of the financial statement on which it is reported. A. Commercial paper B. Receivables C. Marketable securities D. Short-term debt