Question 1

The holding of cash to meet the firms day-to day commitments means that cash is being held for a:

Accepted Answer

A) transactionary motive. 
B) precautionary motive. 
C) speculative motive. 
D) none of the above. 
A) transactionary motive. 
B) precautionary motive. 
C) speculative motive. 
D) none of the above.

Question 2

Management of working capital is important because it affects the firm's:

Accepted Answer

A) profitability. 
B) risk. 
C) liquidity. 
D) all of the above. 
A) profitability. 
B) risk. 
C) liquidity. 
D) all of the above.

Question 3

Sales forecasts to help determine the amount of inventory to be held can be based on all of the following except:

Accepted Answer

A) the use of statistical techniques. 
B) the judgement of sales staff. 
C) the rate of inflation. 
D) none of the above, i.e., all can be used to determine sales forecasts. 
A) the use of statistical techniques. 
B) the judgement of sales staff. 
C) the rate of inflation. 
D) none of the above, i.e., all can be used to determine sales forecasts.

Question 4

Which statement concerning trade credit is not true?

Accepted Answer

A) A discount of 1% offered for prompt payment of amounts owning to creditors is hardly worth taking. 
B) Trade credit is an important source of finance for most businesses. 
C) Trade credit is generally regarded as a 'free' source of finance. 
D) Credit can be a more convenient method of paying for goods than cash. 
A) A discount of 1% offered for prompt payment of amounts owning to creditors is hardly worth taking. 
B) Trade credit is an important source of finance for most businesses. 
C) Trade credit is generally regarded as a 'free' source of finance. 
D) Credit can be a more convenient method of paying for goods than cash.

Question 5

The economic order quantity model is concerned with answering the question:

Accepted Answer

A) How much inventory should be held? 
B) What should be the size of an inventory order? 
C) What is the cost of ordering inventory? 
D) All of the above. 
A) How much inventory should be held? 
B) What should be the size of an inventory order? 
C) What is the cost of ordering inventory? 
D) All of the above.

Question 6

Gordon Enterprises usually takes 60 days to pay its suppliers. In order to encourage prompt payment, supplier Y offers Flash Enterprises a 2% discount for payment within 10 days. What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Accepted Answer

A) 11%. 
B) 14.6%. 
C) 9.1%. 
D) 1.5%. 
A) 11%. 
B) 14.6%. 
C) 9.1%. 
D) 1.5%.

The holding of cash to meet the firms day-to day commitments means that cash is being held for a:

Management of working capital is important because it affects the firm's:

Sales forecasts to help determine the amount of inventory to be held can be based on all of the following except:

Which statement concerning trade credit is not true?

The economic order quantity model is concerned with answering the question:

Gordon Enterprises usually takes 60 days to pay its suppliers. In order to encourage prompt payment, supplier Y offers Flash Enterprises a 2% discount for payment within 10 days. What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Cost-Volume-Profit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

Financing the Business

Filters

Exam 13: The Management of Working Capital

The holding of cash to meet the firms day-to day commitments means that cash is being held for a:

Management of working capital is important because it affects the firm's:

Sales forecasts to help determine the amount of inventory to be held can be based on all of the following except:

Which statement concerning trade credit is not true?

The economic order quantity model is concerned with answering the question:

Gordon Enterprises usually takes 60 days to pay its suppliers. In order to encourage prompt payment, supplier Y offers Flash Enterprises a 2% discount for payment within 10 days. What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Cost-Volume-Profit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

Financing the Business

Filters