Chapter 14

15. . 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. cash disbursements budget

20. 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.

A. gaming the payment process

23. 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.

A. payables

4. 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. receivables

12. 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.

A. the service provider records the gross amount of each credit card sale

2. 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. cash-to-cash cycle

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

B. commercial paper

9. 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

B. company book balance

16. 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. foregoing receivables

25. 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

B. overdraft

6. 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.

B. receivables

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

B. stock options

18. 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.

B. taking on noncore paying projects

21. 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

B. using personal money

24. 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

C. cash flow from subsidies

14. . 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

C. cash receipts budget

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

C. payables

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

C. profit

11. 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.

C. the deposits you have made after bank closing

10. 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.

D. availability float and processing float

22. 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.

D. cash-to-cash cycle

13. 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.

D. charge back

17. 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. discount for prompt payments

26. 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.

D. offering discounts for deferred payments

7. . _____ 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

D. short-term debt

1. 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.

D. unexpected increases in taxes