Question 1

How should a small business owner manage his/her accounts payable?

Accepted Answer

Set scheduling goals

Question 2

Discuss the five basic steps to establishing a cash budget for a business.

Accepted Answer

The cash budgeting procedure outlined in

Question 3

Cash budget is the same as "cash map."

Accepted Answer

A) True 
 B)False

Question 4

The Fair Debt Collection Practices Act prohibits business owners from:

Accepted Answer

A) harassing people who are past due. 
B) sending invoices the same day the product is shipped. 
C) hiring debt collection attorneys. 
D) referring past-due bills to collection agencies. 
A) harassing people who are past due. 
B) sending invoices the same day the product is shipped. 
C) hiring debt collection attorneys. 
D) referring past-due bills to collection agencies.

Question 5

At the end of a capital lease,a business has no option left to purchase the equipment.

Accepted Answer

A) True 
 B)False

Question 6

A firm whose sales volume is expanding rapidly need not be concerned about managing its cash flow.

Accepted Answer

A) True 
 B)False

Question 7

A ________ is a checking account that technically never has funds in it but is tied to another master account like payroll.

Accepted Answer

A) cash account 
B) money market account 
C) zero balance account 
D) sweep account 
A) cash account 
B) money market account 
C) zero balance account 
D) sweep account

Question 8

The danger inventory poses to a small business is the amount of cash it ties up.

Accepted Answer

A) True 
 B)False

Question 9

A ________ is a contract in which a business selling an asset on credit gets a security interest in that asset,protecting the company's legal rights in case the buyer fails to pay.

Accepted Answer

A) security agreement 
B) lock box 
C) cash on delivery agreement 
D) None of the above 
A) security agreement 
B) lock box 
C) cash on delivery agreement 
D) None of the above

Question 10

Which of the following would be a potential source of information for a sales forecast?

Accepted Answer

A) Past records 
B) Trade associations and the Chamber of Commerce 
C) Similar firms 
D) All of these 
A) Past records 
B) Trade associations and the Chamber of Commerce 
C) Similar firms 
D) All of these

Question 11

Cash management involves:

Accepted Answer

A) forecasting. 
B) collecting. 
C) disbursing and investing. 
D) All of the above 
A) forecasting. 
B) collecting. 
C) disbursing and investing. 
D) All of the above

Question 12

An arrangement in which customers mail their payments on account to a post office box which the company's bank monitors,from which it collects the payments,and then immediately deposits the payments into the firm's interest-bearing account is called a:

Accepted Answer

A) zero balance account. 
B) lockbox. 
C) sweep account. 
D) credit reference. 
A) zero balance account. 
B) lockbox. 
C) sweep account. 
D) credit reference.

Question 13

When investing surplus cash,the small business owner's key objectives should be:

Accepted Answer

A) high yields. 
B) current income. 
C) liquidity and safety. 
D) long-term yield. 
A) high yields. 
B) current income. 
C) liquidity and safety. 
D) long-term yield.

Question 14

Once the owner determines an adequate minimum cash balance,what is the next step in creating a cash budget?

Accepted Answer

A) Forecasting profits 
B) Forecasting sales 
C) Forecasting cash receipts 
D) Forecasting cash disbursements 
A) Forecasting profits 
B) Forecasting sales 
C) Forecasting cash receipts 
D) Forecasting cash disbursements

Question 15

Some companies manage their accounts receivable and cash by using sweep accounts.These are accounts where all funds above a certain minimum are automatically moved into an interest-bearing account.

Accepted Answer

A) True 
 B)False

Question 16

A cash budget is only as accurate as the ________ forecast from which it is derived.

Accepted Answer

A) profit 
B) receivables 
C) income 
D) sales 
A) profit 
B) receivables 
C) income 
D) sales

Question 17

Which of the following are credit reporting services a small business owner could use to check a customer's credit?

Accepted Answer

A) National Association of Credit Management 
B) TRW 
C) Dun & Bradstreet 
D) All of these 
A) National Association of Credit Management 
B) TRW 
C) Dun & Bradstreet 
D) All of these

Question 18

When an account becomes overdue,entrepreneurs must take immediate action.

Accepted Answer

A) True 
 B)False

Question 19

Carrying too much inventory decreases the chances that a business will run out of cash.

Accepted Answer

A) True 
 B)False

Question 20

How can an entrepreneur manage inventory in order to improve cash flow?

Accepted Answer

Don't over stock,manage sales and coordi

Exam 15: Managing Cash Flow

How should a small business owner manage his/her accounts payable?

Discuss the five basic steps to establishing a cash budget for a business.

Cash budget is the same as "cash map."

The Fair Debt Collection Practices Act prohibits business owners from:

At the end of a capital lease,a business has no option left to purchase the equipment.

A firm whose sales volume is expanding rapidly need not be concerned about managing its cash flow.

A ________ is a checking account that technically never has funds in it but is tied to another master account like payroll.

The danger inventory poses to a small business is the amount of cash it ties up.

A ________ is a contract in which a business selling an asset on credit gets a security interest in that asset,protecting the company's legal rights in case the buyer fails to pay.

Which of the following would be a potential source of information for a sales forecast?

Cash management involves:

An arrangement in which customers mail their payments on account to a post office box which the company's bank monitors,from which it collects the payments,and then immediately deposits the payments into the firm's interest-bearing account is called a:

When investing surplus cash,the small business owner's key objectives should be:

Once the owner determines an adequate minimum cash balance,what is the next step in creating a cash budget?

Some companies manage their accounts receivable and cash by using sweep accounts.These are accounts where all funds above a certain minimum are automatically moved into an interest-bearing account.

A cash budget is only as accurate as the ________ forecast from which it is derived.

Which of the following are credit reporting services a small business owner could use to check a customer's credit?

When an account becomes overdue,entrepreneurs must take immediate action.

Carrying too much inventory decreases the chances that a business will run out of cash.

How can an entrepreneur manage inventory in order to improve cash flow?

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

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

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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