Exam 17: Working Capital Management

The UpTowner writes 39 checks a day for an average amount of $918 each.These checks generally clear the bank 2.5 days after they are written.In addition, the firm generally receives an average of $53,419 a day in checks.The checks that are received are deposited immediately and the funds are generally available the following day.What is the amount of the firm's disbursement float?

How quickly can a bank receive payment once it transmits a copy of a check to the bank on which the check was drawn?

Which statement is correct?

Which of these is the best example of a raw material?

On April 14, Robertsons's purchased $10,200 worth of inventory.The terms of sale were 3/10, net 30.The implicit interest is _____ and the effective annual rate is _____ percent.

Taylor's Market received five checks today and went to the bank to deposit all of them.Unfortunately, the bank was closed for the day due to a robbery.How does the bank closure affect the firm's float assuming these five checks are the only outstanding bank items?

Roberts Trucking writes two checks a day for an average amount of $17,750 each.These checks generally clear the bank 2.3 days after they are written.In addition, the firm generally receives and deposits checks amounting to $25,650 each day.All deposits are available the next day.What is the firm's net float?

Which one of the following is most commonly used in international trades?

Cymbal Sales sells 725 musical instruments a year at an average price per instrument of $750.All sales are credit sales with terms of 2/10, net 30.The company has found that 67 percent of its customers take advantage of the discounted price.What is the amount of the firm's average accounts receivable? The discount amount is applied to a customer's account only after payments have been received and processed.Assume a 365-day year.

Float is defined as the difference between the:

The optimal credit policy of any firm will:

You purchased an item costing $4,895 on April 15.The terms of sale were 2/7, net 15.What is the last day you can pay the discounted price?

Eastlake's has an average collection period of 25 days.Its average daily investment in accounts receivables is $43,566.What are its annual credit sales? Assume a 365-day year.

BJ's just reconciled its bank account and has $10,800 in outstanding deposits, $26,300 in checks outstanding, and a positive checkbook balance.The firm sells on a cash-only basis and deposits its receipts at the bank daily.The deposited funds are available to the firm the following day.The firm writes and mails checks on a daily basis also.These checks generally clear the bank in three days.What do you know about the firm's float given this information?

On any given day, Marlene's receives and deposits numerous checks worth an average combined total of $2,348.The funds from these checks are generally available in 1.5 days.Every day the firm mails out checks totaling $1,900 that generally take 1.7 days to clear the bank.What is the amount of the disbursement float if the opening bank balance was $1,015 with no outstanding items?

Which of these practices will reduce a firm's collection float? I.Installing a lockbox system II.Utilizing zero-balance accounts III.Depositing checks daily rather than weekly IV.Reducing the processing delay by one day

To minimize collection float, a firm should do which of the following? I.Deposit its collections at least daily II.Make sure all checks it receives at the sales counter are properly dated and signed III.Pay its bills in a more timely manner IV.Eliminate its regional lockboxes and have only one central lockbox located near the firm's home office

Which of these is a shortage cost?

A bill given to a customer for goods he or she purchased is called a(n):

A firm grants credit with terms of 2/10, net 30.The firm's customers have ___ days to pay in order to receive a _____ percent discount.