chapter 12

is a medium of exchange accepted by the community.

Money

For all small businesses, the cash receipts budget is the same as the sales budget.

False

The most prevalent way employees steal cash from employers is through larceny and embezzlement.

False

Which of the following statements regarding demand deposits are correct?

Demand deposits make up most of the noncurrency cash. Checking and savings accounts are the two most common forms of demand deposits. Owners may withdraw money on demand by using a check, draft, currency, or electronic transfer.

In the context of a cash disbursements budget, which of the following factors are combined to predict the amount and timing of cash discharge?

Knowledge of payment patterns Estimate of expenses

Which of the following represents a best cash flow management practice?

There should be enough cash available to meet a business' needs. Owners should understand how and when the business uses its cash. Accounts receivables should be closely monitored for late payments. Owners should be able to obtain cash quickly from a variety of sources.

Amounts that are owed to a business for merchandise that was sold on credit are called ______.

receivables

Business can earn cash flow from operations, investing and

financing

Which of the following are true of progress payments?

They are received from customers. They are quite commonplace in the construction industry.

Cash is

money that is immediately available to be spent.

Using a computerized accounting system, which of the following documents may be generated that will indicate the amount of cash a business needs immediately?

An accounts payable report An accounts receivable report

______ is planning and tracking the amounts and timing of money to be received and paid during the business cycle.

Cash flow management

Which of the following statements regarding currency are correct?

Currency consists of both bills and coins. More than half of U.S. currency is held outside the U.S. According to the Federal Reserve, there is $1.7 trillion in circulation as of January 31, 2019.

______ consists of stocks and bonds that are traded on an open market.

Marketable securities

Which of the following are the most common means by which employees steal cash from their employers?

Skimming Phony disbursements Larceny and embezzlement

Which of the following elements are likely to be included under the recurring payments section of a cash flow report?

Wages Rent

The bills and coins printed by governments to represent money are called ______.

currency

Money held in checking and savings accounts are/is called ______.

demand deposits

Which of the following statements regarding cash equivalents are correct?

Examples of cash equivalents are marketable securities, commercial paper, and debt investments that mature in less than three months. They are assets that may be turned into cash in as little as a few hours. Businesses use cash equivalents to measure how much money is available to be spent.

purpose for money

Keep track of wealth. Measure the value of tangible and intangible things. Facilitate exchange of unlike assets.

Which of the following statements regarding the cash budget are correct?

Business owners estimate expected incomes and expenses and when these transactions will occur in order to create the cash budget. All business budgeting begins with a forecast of sales. It is the key to cash planning for small businesses.

Which of the following are sources of cash?

Selling a business' products and services & collecting cash from customers. Investment that a business has made, such as in stocks, bonds, and land. Through financing through debt or equity.

The ___ identifies when, how, and why cash is expected to coming into a 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 money out of a business.

cash disbursements budget

Assets that may be quickly converted to cash are called ______.

cash equivalents

A ______ budget is a schedule of the amounts and timings of the receipt of cash into a business.

cash receipts

Which of the following statements regarding marketable securities are correct?

Government issued debts in the form of bonds, notes, and bills are marketable securities. Marketable securities are bought and sold on major exchanges, such as the NASDAQ. They represent either ownership or debt of publicly held firms.

Payables are

amounts that are owed to vendors for merchandise or services purchased on credit.

Amounts that are owed to vendors for merchandise or services purchased on credit are known as ______.

payables

Receivables are

amounts that are owed to a business for merchandise that was sold on credit.