Exam 15: Managing Cash Flow

Sweep account refers to:

The American Collector's Association has found that only about ________ of accounts over 90 days delinquent will be paid voluntarily.

Marking down inventory items that don't sell will result in:

At the end of a(n)________,a business may exercise an option to purchase the equipment,usually for a nominal sum.

The longer a company's cash flow cycle,the more likely it is to encounter a cash crisis.

Cash is money that flows through the business and is not tied up in any asset.

A firm whose sales fluctuate widely over a relatively short time might require a ________ cash budget.

________ refers to buying much needed materials,equipment,and supplies-without using cash.

Generally speaking,most small business owners tend to:

Profit is the difference between a company's total revenue and its total expenses.

Cash flow cycle refers to the time lag between paying suppliers for merchandise and receiving payment from customers.

Create a credit and collection policy for a privately owned small bookstore/café which has a number of customers who buy pastries on account and numerous customers with standing book orders that they pay on once a month.

Bartering refers to buying much needed materials,equipment,and supplies in exchange of other products or services and cash.

To estimate a firm's cash balance for each month,the owner must first wait until the end of the month.

When it comes to trade credit,the small business owner:

An important source of credit information that collects information on small businesses that other reporting services ignore is:

A sweep account automatically "sweeps" all funds in a company's checking accounts above a predetermined minimum into an interest-bearing account.

Once a credit account becomes past due,a small business owner should:

The purchases for inventory and production lead sales.This statement means that:

The cash flow cycle is the time lag between paying suppliers and receiving payment from customers.