Ch_18_S_Key - Cf09Ch18Q1F11 Key 1. The length of time...

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1 Cf09Ch18Q1F11 Key 1. The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the: A. operating cycle. B. inventory period. C. accounts receivable period. D. accounts payable period. E. cash cycle. Refer to section 18.2 2. A graphical representation of the operating and cash cycles is called a(n): A. operating chart. B. cash flow time line. C. production flow line. D. component chart. E. working time line. Refer to section 18.2 3. Money deposited by a borrower with the bank in a low or non-interest-bearing account as a condition of a loan agreement is called a: A. compensating balance. B. secured credit deposit. C. letter of credit. D. line of credit. E. pledge. Refer to section 18.5 4. Which of the following determines the length of the operating cycle? I. cash cycle II. inventory period III. accounts payable period IV. accounts receivable period A. I and III only B. II and IV only C. I, II, and IV only D. II, III, and IV only E. I, II, III, and IV Refer to section 18.2
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2 5. Which one of the following is indicative of a short-term restrictive financial policy? A. purchasing inventory on an as-needed basis B. granting credit to all customers C. investing heavily in marketable securities D. maintaining a large accounts receivable balance E. keeping inventory levels high Refer to section 18.3 6. Shortage costs include which of the following? I. disruption of production schedules II. inventory ordering costs III. lost customer goodwill IV. brokerage costs A. I and II only B. II and III only C. II, III, and IV only D. I, II, and III only E. I, II, III, and IV Refer to section 18.3 7. Which one of the following increases cash? A.
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This note was uploaded on 11/29/2011 for the course FINANCE 332 taught by Professor Linney during the Fall '11 term at Guilford Tech.

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Ch_18_S_Key - Cf09Ch18Q1F11 Key 1. The length of time...

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