Exam 15: Managing Cash Flow

Rather than build the current year's budget on increases from the previous year's budget,zero-based budgeting starts from a budget of zero and evaluates the necessity of every item.

What are the steps to creating a cash budget (not necessarily in order)?

Selling on credit is a common practice in business.

Ideally,a small firm's cash balance should be two times its average weekly sales.

When estimating the firm's end-of-month cash balance the owner should first:

Lease is considered a liability on the balance sheet.

Typically,a small firm should prepare a monthly cash budget for at least one year into the future.

The cash budget is based on the ________ method of accounting.

When investing surplus cash,the small business owner should seek the highest returns possible on the money.

________ is simply a "cash map" which shows the amount and the timing of cash receipts and cash disbursements over time.

If a small firm's profits are climbing,the owner can be sure its cash balance also is rising.

One of the most reliable methods of determining an adequate minimum cash balance is using past experience.

A bank account that technically never has funds in it but is tied to another master account so that when checks are presented for payment the master account is debited,permitting the company to use its own money during the "float" period,is called a(n):

A small business owner could accelerate accounts receivable by:

________ is not one of the three estimates a financial analyst suggests.

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

A lease is treated as an operating expense and is not carried as a liability on a company's balance sheet.

The real benefit of barter for the entrepreneur is that:

If a small business owner receives a "Notice of Filing" from a customer,he should:

At the end of a(n)________,a business turns the equipment back over to the leasing company with no further obligation.