mgt chap 13

Which of the following does not result in immediate changes in the available balance at the bank? A. A check written on the account B. Electronic transfers C. Cash withdrawals D. Deposits of cash

A

Which of the following is the most common noncash incentive given to an employee? A. Stock options B. Autonomy C. Benefits packages D. Telecommuting

A

Which of the following steps helps to protect cash from being stolen by employees? A. Running periodic credit checks on employees who have access to a business's finances B. Having internal and external audits and ignoring any variances in the budget C. Assigning only one person to authorize bill payments and to write the checks for payments D. Hiring an employee to examine every aspect of cash inflows of a business

A

A jewelry store promises to deliver custom-made wedding rings to a buyer within 2 weeks. However, it charges ten percent of the sales price in advance. In this example, which of the following techniques is the store using to increase cash inflows? A. It is offering discounts to customers for prompt payment. B. It is taking deposits and progress payments. C. It is factoring all receivables. D. It is taking on noncore paying projects.

B

_____ is a schedule of the amounts and timings of the cash coming into a business. A. Cash disbursements budget B. Cash receipts budget C. Comprehensive budget D. Capital budget

B

_____ 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. A. Barter B. Consignment C. Noncash incentive D. Benchmarking

B

Checking and savings accounts are the most common forms of _____. A. commercial papers B. marketable securities C. demand deposits D. debt investments

C

Percentage of concession in gross invoice amounts provided to encourage prompt payment are called _____. A. receivables B. noncash incentives C. trade discounts D. charge backs

C

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

C

Money that is immediately available to be spent is called _____. A. receivable B. stock C. chargeback D. cash

D

Approximately 90 percent of small businesses that fail do so because of ________. A. not enough money flowing out of the business B. too much money flowing in to the business C. lack of profitability D. cash flow problems

D

A reduction in the bank account of a merchant by a credit card company is termed _____. A. charge back B. liquidity C. overdraft D. reconciliation

A

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major. Within a few months, the sales increase exponentially which results in a shortage of cash needed to expand their business. This crisis is termed _____. A. nonsufficient funds B. growth trap C. charge back D. reconciling

B

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

B

Cash flow management is not: A. being able to obtain cash quickly from a variety of sources. B. providing motivation for customers to make prompt payments. C. obtaining all cash from business operations. D. closely monitoring accounts receivable for late payments.

C

Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called: A. cash flow from subsidy. B. cash from financing. C. cash flow from operations. D. cash flow from investing.

C

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. David prepares the quarterly budget and maintains a company book for recording all transactions. The company book balance that David regularly updates is the sum of: A. the actual amount of cash that is available to the firm at any specific time. B. the deposits and withdrawals recorded in a bank's accounting records. C. the cash inflows and cash outflows recorded in the firm's accounting records. D. the negative balance in a depositor's bank account.

C

The _____ is a schedule of the amounts and timings of payments of cash out of a business. A. comprehensive budget B. capital budget C. cash disbursements budget D. cash receipts budget

C

A _____ is a form of money that can be immediately used to make payments. A. debt investment B. marketable security C. commercial paper D. traveler's check

D

_____ is a method that employees use to steal cash after it has been received and recorded in the company books. A. Racketeering B. Phony disbursement C. Skimming D. Embezzlement

D

A(n) _____ refers to the sum of cash inflows and cash outflows recorded in a firm's accounting records. A. company book balance B. bank ledger balance C. overdraft balance D. bank available balance

A

Training and flexible hours are a part of the _____ strategy used to control money that is expected to leave the firm. A. noncash incentive B. trade discount C. barter system D. gaming payment

A

A negative balance in a depositor's bank account is referred as a(n) _____. A. availability float B. overdraft C. ledger balance D. charge back

B

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business, are called _____. A. discount projects B. charge backs C. noncore projects D. consignments

C

Which of the following maintains a record of the inflows and outflows in a cash account? A. Overdraft balance B. Bank available balance C. Bank ledger balance D. Company book balance

D

After _________, the corrected bank balance and corrected book balance will be identical. A. cash flow management B. reconciling C. a comprehensive budget D. deposits and progress payments

B

Debt investments that mature in less than three months are an example of _____. A. currency B. cash equivalents C. demand deposits D. traveler's checks

B

The sum of money that has actually been received and paid out of a depositor's account is termed _____. A. bank ledger balance B. company book balance C. bank available balance D. overdraft balance

C

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. A. bearer B. overdraft C. charge back D. cash budget

D

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who would manage the budgets and expenses of the business. Tammy buys her craft materials on credit from her supplier but clears all her debts at the end of every month. The amount that Tammy owes her supplier is referred to as _____. A. payables B. charge backs C. deposits D. receivables

A

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

A

An entity that processes checks and electronic fund transfers for banks and other financial organizations is called a _____. A. credit union B. clearinghouse C. float D. bearer

B

Which of the following is an example of a cash equivalent? A. Currency B. Commercial paper C. Demand deposit D. Traveler's check

B

_____ represent either ownership or debt of publicly held firms and government issued debt, in the form of bonds, notes, and bills. A. Demand deposits B. Marketable securities C. Set-asides D. Traveler's checks

B

In a business, accepting payments by credit card causes significant differences between the bank and book balances because the credit card service provider: A. records the gross amount of each credit card sale. B. deposits the amount of the sale in the business's account on the date of the sale itself. C. deposits the sale amount in the business's account after deducting a service fee. D. retains the sale amount in the business's account in the event of customer challenge.

C

A crisis in which there is a shortage of cash for expanding a business after an exponential increase in sales is termed _____. A. nonsufficient funds B. reconciling C. charge back D. growth trap

D

According to the definition provided by the U.S. Dallas Federal Reserve Bank, which of the following is one of the primary purposes of money? A. Creating competition B. Maximizing the wealth of all citizens equally C. Creating cash flow statements D. Making exchanges

D

Amounts owed to vendors for merchandise or services purchased on credit are called _____. A. receivables B. deposits C. charge backs D. payables

D

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major. Jane purchases a picture frame from Tammy using a credit card. She notices a crack in the frame and returns it to Tammy. Jane contacts the credit card service provider for a refund. The credit card company removes the sale amount from Tammy's account which is referred to as a(n) _____. A. incentive B. liquidity C. overdraft D. charge back

D

Which of the following terms refers to the accounting process that identifies the causes of all differences between book and bank balances? A. Clearing house B. Float C. Charge back D. Reconciling

D

Commercial paper is issued to be paid to the _______ of the note, and thus is fully transferable. A. writer B. holder C. owner D. bearer

D

Reconciliation of bank and book balances helps to: A. estimate the bank ledger balance for managing the cash flow of a business. B. identify any mistakes made by either a bank or by a business. C. provide an approximate value of cash held by a business. D. exclude items on a bank statement that are not included in a business's accounting records.

B

The vast majority of small businesses depend on _______ to store cash, handle checks and credit cards, and finance their debt through credit. A. owner loans B. banks C. finance companies D. family and friends

B

The information that the account holder knows about his or her account, but the bank does not know, includes: A. the amount of service charges taken from the account. B. any direct payments made to the account by the holder's customers. C. any deposits the holder has made after bank closing. D. the amount of any interest received or charged.

C

We use many electronic forms of money: debit cards, online bill payments, electronic bank drafts, and wire transfers. These forms of money make an important point - the essence of money is that it is a form of ______. A. cash B. currency C. information D. growth trap

C

Which of the following is a strategy to handle cash shortfalls in small businesses? A. Purchasing investments B. Increasing payables C. Borrowing money D. Retaining employees

C

Which of the following is a technique used by a small business to increase cash inflows? A. Making deposits and progress payments B. Forgoing any receivables C. Offering discounts for prompt payment D. Refusing any noncore paying projects

C

Which of the following is defined as the practice of "pocketing" money from customers and hiding the theft by not recording the sale? A. Embezzlement B. Larceny C. Skimming D. Phony disbursement

C

_____ refers to amounts that are owed to a business for merchandise that was sold on credit. A. Payables B. Deposits C. Receivables D. Charge backs

C

Which of the following strategies is used by a business to decrease cash outflows? A. Refusing the trade discounts offered by suppliers B. Taking on noncore paying projects C. Trading goods and services using only money D. Avoiding the wastage of resources

D

_____ make up most of the noncurrency cash which is available immediately. A. Marketable securities B. Debt investments C. Commercial papers D. Demand deposits

D

According to the poll conducted by the National Federation of Independent Business (NFIB), small business faced cash flow problems because of: A. delayed payments from customers. B. lack of seasonal fluctuation in sales. C. delayed payments from vendors. D. unexpected increases in taxes.

A

Josh, the owner of a software company, is facing cash flow problems. To control the cash outflow, he avoids paying the bills to his vendors. After much delay, he sends a check in payment but intentionally forgets to sign the check. To prevent the cash from going out of his business, Josh is applying the strategy of _____. A. gaming the payment process B. timing the purchases C. noncash incentives D. trade discount payments

A

Many businesses have either relatively few large sales events or highly seasonal sales that complicate forecasting cash inflows. Which of the following is not an example of such a company? A. A restaurant B. Retailing C. Real estate brokers D. Water parks

A

Susan, who is a florist, purchases her flowers on credit. Lucy, a customer, takes eight bouquets and promises to pay Susan within two weeks. The amount that Lucy owes Susan is termed _____. A. receivables B. deposits C. charge backs D. payables

A

_____ is a method of borrowing against receivables. A. Factoring B. Trading C. Discounting D. Reconciling

A

_____ 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. A. Bank ledger balance B. Company book balance C. Overdraft balance D. Bank available balance

A

_____ is the practice of trading goods and services without the use of money. A. Barter B. Consignment C. Noncash incentive D. Float

A

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? A. Shoplifting B. Embezzlement C. Skimming D. Phony disbursement

B

Maintaining an inventory helps a business to have an optimal level of cash flow by: A. increasing the cost of carrying inventory. B. reducing the cost of processing orders. C. reducing cash inflow due to being out of stock. D. increasing cash outflow due to waste resources.

B

Profits are not _______. Profits are information that is useful in predicting when and how much money you may collect. A. receivables B. money C. payables D. cash

B

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. Tammy receives a bulk order from a customer to make 100 paper roses for Valentine's Day. She charges 20 percent of the total sales price in advance and promises to deliver the order within 30 days. The advance payment that Tammy receives for the order before delivering the product is called _____. A. discount payment B. deposit and progress payment C. noncash incentive D. gaming the payment process

B

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. Within a few months, David notices problems in cash flow. Although not the primary strategy of her business, Tammy takes up craft projects for kindergarten schools in an effort to increase cash inflow. This kindergarten project is an example of a(n) _____. A. consignment B. noncore project C. charge back D. arraignment

B

The information that the bank knows about an account, but is not known by the account holder, includes: A. the checks written and mailed by an account holder but have not been received by the bank. B. the amount of any direct payments made in the account by the account holder's customers. C. deposits that the account holder has mailed or made after bank closing. D. the sum of cash inflows and cash outflows recorded in the holder's accounting records.

B

The most common strategy employed by small businesses for handling money shortages is _____. A. adjusting scheduled payments B. using personal money C. selling investments D. laying off employees

B

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. A. seasonal B. operating C. credit D. chargeback

B

Cash that can be obtained from stocks, bonds, land, buildings, or equipment that a business has is called: A. cash flow from operations. B. cash from financing. C. cash flow from subsidy. D. cash flow from investing.

D

For a business to factor receivables, the _____ must have good credit ratings. A. suppliers B. business C. vendors D. customers

D

For businesses that gross in excess of $10 million per year, pro forma amounts are usually _________. A. stated in exact amounts B. rounded to the nearest one hundred dollars C. rounded to the nearest ten thousand dollars D. rounded to the nearest one thousand dollars

D

Mr. Hill, who runs a key-chain manufacturing unit, buys raw materials from his supplier during the first week of every month. The supplier's policy states that all payments need to be cleared within 50 days of buying the materials. This schedule ensures that Mr. Hill gets an extended period to make payments thus controlling when the payment is made. Which of the following strategies is Mr. Hill using to control cash outflow? A. Taking a consignment B. Offering trade discount C. Gaming the payment process D. Timing the purchase

D