SOLUTION MCQ chap026 - Chapter 019 Short-Term Finance and...

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SOLUTION MCQ chap026

1 .   The length of time between the acquisition of inventory and the collection of cash from receivables is called the :
a. operating cycle .
b. inventory period .
c. accounts receivable period .
d . accounts payable period .
e . cash cycle .
2 .   The length of time between the acquisition of inventory and it s subsequent sale is called the :
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3 .   The length of time between the sale of inventory and the collection of cash from receivables is called the :
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4 .   The length of time between the acquisition of inventory by a firm and the payment by the firm for that inventory is called the :
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5 .   First United pays for an inventory item on day X. On day Y , First United receives payment from the customer who purchased that inventory item . The time period between day X and day Y is called the :
a. operating cycle .
b. inventory period .
c. accounts receivable period .
d . accounts payable period .
e . cash cycle .
Answer:  B.   cash cycle .
6 .   A graphical representation of the operating and cash cycles is called a ( n ) :
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7 .   Costs that increase as a firm acquires additional current assets are called _____ costs .
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8 .   Costs that decrease as a firm acquires additional current assets are called _____ costs .
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9 .   A forecast of cash receipts and disbursements for the next planning period is called a:
a. pro forma income statement .
b. statement of cash flows .
c. cash budget .
d . receivables analysis .
e. credit analysis .
10 .   A prearranged , short - term bank loan made on a formal or informal basis , and typically reviewed for renewal annually , is called a ( n ) :
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11 .   Money deposited by a borrower with the bank in a low or non-interest - bearing account as part of a loan agreement is called a :
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12 .   Secured financing on a short - term basis that involves either the assignment or the factoring of receivables is called :
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13 .   A short - term loan secured by the borrower 's inventory , either directly or via an intermediary , is called a ( n ) :
a. debenture .
b. line of credit .
c. banker 's acceptance .
d. working loan .
e. inventory loan .
14 .   Which one of the following increases cash ?
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15 .   Which of the following are uses of cash ? I. purchasing stock in another firm as an investment II . increasing the amount of inventory on display III . obtaining a bank loan IV . paying a supplier for previous purchases
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16 .   Which one of the following will increase net working capital ? Assume the current ratio is greater than 1.0 .
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17 .   Which one of the following will decrease the net working capital of a firm ? Assume the current ratio is greater than 1.0 .
a. selling inventory at cost
b. collecting an accounts receivable
c. paying a payment on a long - term debt
d . selling a fixed asset for book value
e . paying an accounts payable
18 .   Which of the following are sources of cash ? I. reducing the level of inventory II . receiving a payment from a customer III . selling additional equity share s IV . retiring bonds
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Financial Management: Theory & Practice
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Chapter 4 / Exercise 4-19
Financial Management: Theory & Practice
Brigham/Ehrhardt
Expert Verified
Chapter 019 Short-Term Finance and Planning17-1 Multiple Choice Questions 1. The length of time between the acquisition of inventory and the collection of cash from receivables is called the: a. operating cycle. b. inventory period. c. accounts receivable period. d. accounts payable period. e. cash cycle.
2. The length of time between the acquisition of inventory and its subsequent sale is called the:
3. The length of time between the sale of inventory and the collection of cash from receivables is called the:
4. The length of time between the acquisition of inventory by a firm and the payment by the firm for that inventory is called the:
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Financial Management: Theory & Practice
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 4-19
Financial Management: Theory & Practice
Brigham/Ehrhardt
Expert Verified
Chapter 019 Short-Term Finance and Planning17-2 5. First United pays for an inventory item on day X. On day Y, First United receives payment from the customer who purchased that inventory item. The time period between day X and day Y is called the: a. operating cycle. b. inventory period. c. accounts receivable period. d. accounts payable period. e. cash cycle.
6. A graphical representation of the operating and cash cycles is called a(n):
7. Costs that increase as a firm acquires additional current assets are called _____ costs.
8. Costs that decrease as a firm acquires additional current assets are called _____ costs.
9. A forecast of cash receipts and disbursements for the next planning period is called a: a. pro forma income statement. b. statement of cash flows. c. cash budget. d. receivables analysis. e. credit analysis.
Chapter 019 Short-Term Finance and Planning17-3 10. A prearranged, short-term bank loan made on a formal or informal basis, and typically reviewed for renewal annually, is called a(n):

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