Chapter 18

Chapter 18 - Chapter 18 - Short-Term Finance and Planning...

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Chapter 18 - Short-Term Finance and Planning Chapter 18 Short-Term Finance and Planning Multiple Choice Questions 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. 2. The length of time that elapses between the day a firm purchases an inventory item and the day that item sells is called the: A. operating cycle. B. inventory period. C. accounts receivable period. D. accounts payable period. E. cash cycle. 3. The length of time between the sale of inventory and the collection of the payment for that sale is called the: A. operating cycle. B. inventory period. C. accounts receivable period. D. accounts payable period. E. cash cycle. 4. The length of time between the day a firm purchases an item from its supplier until the day that supplier is paid for that purchase is called the: A. operating cycle. B. inventory period. C. accounts receivable period. D. accounts payable period. E. cash cycle. 18-1
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Chapter 18 - Short-Term Finance and Planning 5. Central Supply purchased a toboggan for inventory this morning and paid cash for it. The time period between today and the day Central Supply will receive cash from the sale of this toboggan 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): A. operating chart. B. cash flow time line. C. production flow line. D. component chart. E. working time line. 7. Costs that increase as a firm acquires additional current assets are called _____ costs. A. carrying B. shortage C. order D. safety E. trading 8. Costs that decrease as a firm acquires additional current assets are called _____ costs. A. carrying B. shortage C. debt D. equity E. payables 18-2
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Chapter 18 - Short-Term Finance and Planning 9. Steve has estimated the cash inflows and outflows for his hardware store for next year. The report that he has prepared recapping these cash flows is called a: A. pro forma income statement. B. sales projection. C. cash budget. D. receivables analysis. E. credit analysis. 10. Taylor Supply has made an agreement with its bank that it can borrow up to $10,000 at any time over the next year. This arrangement is called a(n): A. floor loan. B. open loan. C. compensating balance. D. line of credit. E. bank note. 11. 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.
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This note was uploaded on 01/16/2012 for the course ECON 2035 taught by Professor Stahl during the Spring '08 term at LSU.

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Chapter 18 - Chapter 18 - Short-Term Finance and Planning...

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