Chapter 13 sb

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

Blank 1: cash Blank 2: disbursements Blank 3: budget

Which of the following statements about reconciling bank balances with a business' book balances are correct? (Check all that apply.)

Businesses should bank where online access to account information that is continuously updated is offered. The owner should reconcile company book balances with bank balances to avoid cash flow problems. Service charges, direct customer payments, interest received or charged, and returned checks will affect the bank balance.

______ are/is money that is immediately available to be spent.

Cash

______ 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 is a purpose for money? (Check all that apply.)

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

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

Business can earn cash flow from operations, investing and

Financing

______ is a financial crisis that is caused by a business growing faster than it can be financed.

Growth trap

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

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

In the context of a cash disbursements budget, which of the following factors are combined to predict the amount and timing of cash discharge? (Check all that apply.)

Knowledge of payment patterns Estimate of expenses

is a medium of exchange accepted by the community.

Money

Which of the following are the most common means by which employees steal cash from their employers? (Check all that apply.)

Skimming Phony disbursements Larceny and embezzlement

Which of the following represents a best cash flow management practice? (Check all that apply.)

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

Which of the following statements regarding discounts for prompt payment are correct?

They are used to motivate customers to pay their bills in full in a timely manner. They may be as much as 2% if the invoice is paid within 5 to 10 business days.

Payables are

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

The company book balance reflects a business' internal accounting record of all transactions that affect ______.

cash

______ 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

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

cash receipts

An entity that processes check and electronic fund transfers for banks and other financial organizations is called a ______.

clearinghouse

The sum of the cash inflows and outflows recorded in a firm's accounting records is the ______ balance.

company book

A reduction in the sales price provided to credit customers for paying outstanding amounts in a timely manner is referred to as a for prompt payment.

discount

Which of the following transactions go through a clearinghouse? (Check all that apply.)

drafts checks Electronic transfers

Cash is

money that is immediately available to be spent.

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

payables

An accounting process that identifies the causes of all difference between book and bank balances is known as ______.

reconciling

Which of the following elements are likely to be included under the recurring payments section of a cash flow report? (Check all that apply.)

Rent Wages

Using a computerized accounting system, which of the following documents may be generated that will indicate the amount of cash a business needs immediately? (Check all that apply.)

An accounts payable report An accounts receivable report

Which of the following statements regarding trade discounts are correct? (Check all that apply.)

The rule of thumb for a trade discount is 1% or greater if the billing period is less than 30 days. One should compare the annual effective interest rate of the discount to the cost of borrowing from other sources. These discounts are given by suppliers and vendors to encourage customer to pay on time.

Which of the following are sources of cash?

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

Which of the following statements about the growth trap are correct? (Check all that apply.)

Too much good news may contribute to a growth trap because of a cash shortage. Growing produces more money, but cash is needed right away to grow, thus the business gets trapped. Businesses that grow at exponential rates often experience the growth trap.

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

trade discounts