Question 1

Hiring both part-time and freelancers rather than full-time workers saves on both the cost of salaries and employee benefits.

Accepted Answer

A) True 
 B)False

Question 2

One important characteristic of bartering is that:

Accepted Answer

A) the value of the products must be identical and the difference can be paid in cash. 
B) the value of exchange of products or services could vary. 
C) the exchange is in cash only. 
D) no cash is being exchanged when bartering. 
A) the value of the products must be identical and the difference can be paid in cash. 
B) the value of exchange of products or services could vary. 
C) the exchange is in cash only. 
D) no cash is being exchanged when bartering.

Question 3

The first step in managing cash more effectively is:

Accepted Answer

A) having an adequate cash reserve for emergency expenditures. 
B) rapid payment of accounts payable. 
C) speeding up payment of accounts receivable. 
D) understanding the company's cash flow cycle. 
A) having an adequate cash reserve for emergency expenditures. 
B) rapid payment of accounts payable. 
C) speeding up payment of accounts receivable. 
D) understanding the company's cash flow cycle.

Question 4

Since even the best sales forecast can be wrong,the small business owner should prepare three forecasts-optimistic,pessimistic,and most likely.

Accepted Answer

A) True 
 B)False

Question 5

Ways to cut overhead cost are:

Accepted Answer

A) when possible buy instead of lease. 
B) avoid non-essential outlays. 
C) hire consultants and full time employees. 
D) None of the above 
A) when possible buy instead of lease. 
B) avoid non-essential outlays. 
C) hire consultants and full time employees. 
D) None of the above

Question 6

Only 60% of a typical business' inventory turns over quickly.

Accepted Answer

A) True 
 B)False

Question 7

The first line of defense against bad debt losses is to have a financial institution extend loans to credit-seeking customers.

Accepted Answer

A) True 
 B)False

Question 8

Because inventory is illiquid,cash invested there is tied up and cannot be used for other purposes.

Accepted Answer

A) True 
 B)False

Question 9

By planning cash needs ahead of time,an entrepreneur is able to:

Accepted Answer

A) reduce the amount of cash flowing out of the company. 
B) develop a sound borrowing and repayment plan. 
C) Both A and B 
D) increase borrowing costs by borrowing only when necessary. 
A) reduce the amount of cash flowing out of the company. 
B) develop a sound borrowing and repayment plan. 
C) Both A and B 
D) increase borrowing costs by borrowing only when necessary.

Question 10

Offer several suggestions on how to trim overhead expenses in order to avoid a cash crunch.Explain how each technique can reduce the cash requirements for a small business.

Accepted Answer

∙ Trimming overhead costs by bartering,l

Question 11

Efficient cash managers:

Accepted Answer

A) disregard trade discounts because of their hidden expenses. 
B) avoid the use of credit cards to stretch their firm's cash balance. 
C) set up a payment calendar in order to both pay on time and take advantage of cash discounts for early payment. 
D) use expressions like "the check's in the mail" to mollify creditors when short on cash. 
A) disregard trade discounts because of their hidden expenses. 
B) avoid the use of credit cards to stretch their firm's cash balance. 
C) set up a payment calendar in order to both pay on time and take advantage of cash discounts for early payment. 
D) use expressions like "the check's in the mail" to mollify creditors when short on cash.

Question 12

The annual losses in bad debts for small businesses is:

Accepted Answer

A) $856 million. 
B) $12 billion. 
C) $42 billion. 
D) $312 million. 
A) $856 million. 
B) $12 billion. 
C) $42 billion. 
D) $312 million.

Question 13

What are the five cash management roles an entrepreneur needs to fulfill in his/her small business?

Accepted Answer

Cash finder,cash pla

Question 14

Jane is arguing with Joan about how much cash on hand their small retail outlet needs as they prepare their cash budget.Jane feels that with the Christmas season coming up,their busiest time,they need more cash handy.Joan feels they don't because their sales volume will be up significantly.Jane and Joan are discussing which step of the cash budgeting process?

Accepted Answer

A) Determining an adequate minimum cash balance 
B) Forecasting sales 
C) Forecasting cash receipts 
D) Forecasting cash disbursements 
A) Determining an adequate minimum cash balance 
B) Forecasting sales 
C) Forecasting cash receipts 
D) Forecasting cash disbursements

Question 15

According to the National Association of Credit Management,receivables are only the second most important item on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Usually,trade credit from vendors is expensive,and small business owners should avoid it.

Accepted Answer

A) True 
 B)False

Question 17

________ companies are most likely to suffer cash shortages.

Accepted Answer

A) Slow-growth 
B) Service 
C) Manufacturing 
D) Fast-growth 
A) Slow-growth 
B) Service 
C) Manufacturing 
D) Fast-growth

Question 18

A cash budget is the document that shows a company the margin between its profit and its costs of goods and how to manage it.

Accepted Answer

A) True 
 B)False

Question 19

The first line of defense against bad debt losses is:

Accepted Answer

A) screening customers carefully before granting them credit. 
B) establishing a firm credit policy in writing. 
C) developing a policy for pursuing past-due accounts. 
D) creating a thorough credit application. 
A) screening customers carefully before granting them credit. 
B) establishing a firm credit policy in writing. 
C) developing a policy for pursuing past-due accounts. 
D) creating a thorough credit application.

Question 20

If you were having difficulty getting your customers to pay in a timely manner,what could you do to speed payment?

Accepted Answer

∙ Speed up orders by having customers fa

Exam 15: Managing Cash Flow

Hiring both part-time and freelancers rather than full-time workers saves on both the cost of salaries and employee benefits.

One important characteristic of bartering is that:

The first step in managing cash more effectively is:

Since even the best sales forecast can be wrong,the small business owner should prepare three forecasts-optimistic,pessimistic,and most likely.

Ways to cut overhead cost are:

Only 60% of a typical business' inventory turns over quickly.

The first line of defense against bad debt losses is to have a financial institution extend loans to credit-seeking customers.

Because inventory is illiquid,cash invested there is tied up and cannot be used for other purposes.

By planning cash needs ahead of time,an entrepreneur is able to:

Offer several suggestions on how to trim overhead expenses in order to avoid a cash crunch.Explain how each technique can reduce the cash requirements for a small business.

Efficient cash managers:

The annual losses in bad debts for small businesses is:

What are the five cash management roles an entrepreneur needs to fulfill in his/her small business?

According to the National Association of Credit Management,receivables are only the second most important item on the balance sheet.

Usually,trade credit from vendors is expensive,and small business owners should avoid it.

________ companies are most likely to suffer cash shortages.

A cash budget is the document that shows a company the margin between its profit and its costs of goods and how to manage it.

The first line of defense against bad debt losses is:

If you were having difficulty getting your customers to pay in a timely manner,what could you do to speed payment?

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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