Question 1

It is possible for a business to make a profit and go out of business due to cash flow problems.

Accepted Answer

A) True 
 B)False  True

Question 2

An invoice marked 3/12 net 30 means that you can take a 3% discount if you pay the bill in 12 days but you must pay the entire balance in 30 days.

Accepted Answer

A) True 
 B)False  True

Question 3

________ measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

Accepted Answer

A) Forecasting 
B) Cash flow 
C) Cash on hand 
D) None of the above 
A) Forecasting 
B) Cash flow 
C) Cash on hand 
D) None of the above B

Question 4

Cash flow measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

Accepted Answer

A) True 
 B)False

Question 5

The nice thing about barter is that there is almost no cost involved in the process.

Accepted Answer

A) True 
 B)False

Question 6

Nearly 80% of companies in the United States use leases to help cash management.

Accepted Answer

A) True 
 B)False

Question 7

What are the big three of cash management? How does each impact the operation of the small business?

Accepted Answer

∙ Controlling accounts receivable requir

Question 8

Some businesses use ________,in which a company bills a portion of its credit customers each day of the month,to smooth out uneven cash receipts.

Accepted Answer

A) process billing 
B) a zero balance account 
C) alternate billing 
D) cycle billing 
A) process billing 
B) a zero balance account 
C) alternate billing 
D) cycle billing

Question 9

Bill and Henry are discussing the volume of cash that has been coming into and going out of their business during the accounting period.They are discussing:

Accepted Answer

A) profit. 
B) net income. 
C) accounts receivable and payable. 
D) cash flow. 
A) profit. 
B) net income. 
C) accounts receivable and payable. 
D) cash flow.

Question 10

To avoid cash crises,many owners add a "cushion" to each cash disbursement account since many expenses run higher than expected.

Accepted Answer

A) True 
 B)False

Question 11

For a small business,cash planning is relatively simple since cash and profits are the same.

Accepted Answer

A) True 
 B)False

Question 12

________ is the money that moves through the business in a continuous cycle.

Accepted Answer

A) Profit 
B) Net income 
C) Cash 
D) Cash flow 
A) Profit 
B) Net income 
C) Cash 
D) Cash flow

Question 13

A cash budget is a forecast of the firm's cash inflows and outflows over a specific time period.

Accepted Answer

A) True 
 B)False

Question 14

Lockbox refers to:

Accepted Answer

A) customers send payments to a post office box the bank maintains. 
B) customers send payments to company's mail box that has a lock. 
C) customers send payments to collection company's mail box. 
D) None of the above 
A) customers send payments to a post office box the bank maintains. 
B) customers send payments to company's mail box that has a lock. 
C) customers send payments to collection company's mail box. 
D) None of the above

Question 15

The wise small business owner should strive to stretch out his/her payables as long as possible without damaging the company's credit rating.

Accepted Answer

A) True 
 B)False

Question 16

The key factor in forecasting cash disbursements for a cash budget is to record them in the month when they are incurred,not when they are paid.

Accepted Answer

A) True 
 B)False

Question 17

________ typically lead(s)sales;________ typically lag(s)sales.

Accepted Answer

A) Production;receivables 
B) Collections;purchases 
C) Receipts;production 
D) Purchases;collections 
A) Production;receivables 
B) Collections;purchases 
C) Receipts;production 
D) Purchases;collections

Question 18

The objectives of cash management are to adequately meet the cash demands of the business and to avoid retaining unnecessarily large cash balances.

Accepted Answer

A) True 
 B)False

Question 19

Define or describe the terms: revenue,cash,profit,cash budget,cash flow,and cash flow cycle.Why is it important to understand the differences among them?

Accepted Answer

Cash and profits are not the same.More b

Question 20

When managing your accounts payable,as a small business owner you should:

Accepted Answer

A) take advantage of any float you have before your check is cashed. 
B) send second notices when payables are only 15 days past due. 
C) pay payables as early as possible. 
D) stretch out all payables as long as possible. 
A) take advantage of any float you have before your check is cashed. 
B) send second notices when payables are only 15 days past due. 
C) pay payables as early as possible. 
D) stretch out all payables as long as possible.

Exam 15: Managing Cash Flow

It is possible for a business to make a profit and go out of business due to cash flow problems.

An invoice marked 3/12 net 30 means that you can take a 3% discount if you pay the bill in 12 days but you must pay the entire balance in 30 days.

________ measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

Cash flow measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

The nice thing about barter is that there is almost no cost involved in the process.

Nearly 80% of companies in the United States use leases to help cash management.

What are the big three of cash management? How does each impact the operation of the small business?

Some businesses use ________,in which a company bills a portion of its credit customers each day of the month,to smooth out uneven cash receipts.

Bill and Henry are discussing the volume of cash that has been coming into and going out of their business during the accounting period.They are discussing:

To avoid cash crises,many owners add a "cushion" to each cash disbursement account since many expenses run higher than expected.

For a small business,cash planning is relatively simple since cash and profits are the same.

________ is the money that moves through the business in a continuous cycle.

A cash budget is a forecast of the firm's cash inflows and outflows over a specific time period.

Lockbox refers to:

The wise small business owner should strive to stretch out his/her payables as long as possible without damaging the company's credit rating.

The key factor in forecasting cash disbursements for a cash budget is to record them in the month when they are incurred,not when they are paid.

________ typically lead(s)sales;________ typically lag(s)sales.

The objectives of cash management are to adequately meet the cash demands of the business and to avoid retaining unnecessarily large cash balances.

Define or describe the terms: revenue,cash,profit,cash budget,cash flow,and cash flow cycle.Why is it important to understand the differences among them?

When managing your accounts payable,as a small business owner you should:

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Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

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The Legal Environment: Business Law and Government Regulation

Filters

typically lead(s)sales; typically lag(s)sales.