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29.
Which of the following actions will tend to decrease the inventory period?
I. discontinuing all slow-selling merchandise
II. selling obsolete inventory below cost just to get rid of it
III. buying raw materials only as needed for the manufacturing process
IV. producing goods on demand versus for inventory
30.
Which one of the following actions will tend to increase the accounts receivable period?
Assume the accounts receivable period is currently 34 days.
31.
An increase in which one of the following is an indicator that an accounts receivable policy
is becoming more restrictive?
32.
If you pay your suppliers five days sooner, then:
33.
Which one of the following will increase the accounts payable period, all else constant?
34.
Which one of the following managers determines which customers must pay cash and
which can charge their purchases?
35.
Which one of the following managers determines when a supplier will be paid?
36.
A firm with a flexible short-term financial policy will:
37.
Which one of the following is indicative of a short-term restrictive financial policy?
38.
Which of the following are associated with a restrictive short-term financial policy?
I. little, if any, investment in marketable securities
II. liberal credit terms for customers
III. low cash balances
IV. increasing inventory levels
39.
The Lumber Mart recently replaced its management team. As a result, the firm is
implementing a restrictive short-term policy in place of the flexible policy under which the
firm had been operating. Which of the following should the employees expect as a result
of this policy change?
I. reduction in sales due to stock outs
II. greater inventory selection
III. decreased sales due to the new accounts receivable credit policy
IV. decreased investment in marketable securities
40.
A flexible short-term financial policy:
41.
A flexible short-term financial policy:
I. increases shortage costs due to frequent cash-outs.
II. tends to increase sales as compared to a restrictive policy.
III. requires a sizeable investment in current assets.
IV. incurs more carrying costs than a restrictive policy.
42.
Shortage costs include which of the following?
I. disruption of production schedules
II. inventory ordering costs
III. lost customer goodwill
IV. brokerage costs
43.
The optimal investment in current assets for an operating firm occurs at the point where:
44.
Which one of the following statements is correct?
45.
Which one of the following statements is correct?
46.
Assume each month has 30 days and a firm has a 60-day accounts receivable period.
During the second calendar quarter of the year, that firm will collect payment for the sales
it made during which of the following months?
47.
The Harvester collects 25 percent of sales in the month of sale, 60 percent of sales in the
month following the month of sale, and 15 percent of sales in the second month following
the month of sale. During the month of April, the firm will collect:
48.
A manufacturing firm has a 90-day collection period. The firm produces seasonal
merchandise and thus has the least sales during the first quarter of a year and the highest
level of sales during the fourth quarter of a year. The firm maintains a relatively steady
level of production which means that its cash disbursements are fairly equal in all
quarters. The firm is most apt to face a cash-out situation in:
49.
Jill is the CFO of Summertime Adventures which is a seasonal firm specializing in products
related to water sports. The firm purchases inventory one month before it is sold and pays
for its purchases 60 days after the invoice date. Sales are highest during July and August.
Currently, Jill is preparing the cash disbursements section of the firm's cash budget. Which
one of the following statements is supported by this information?
50.
Which two of the following are most apt to cause a cash-out for a firm that is generally
financially sound?
I. fixed expenses
II. fixed asset purchases
III. flexible financing policy
IV. highly seasonal sales
51.
Which one of the following statements is correct concerning the cash balance of a firm?
52.
A cumulative cash deficit indicates a firm:
53.
The most common means of financing a temporary cash deficit is a:
