What is the name of the exchange rate system where the governments attempt to make sure the values of their currencies trade at particular values in the foreign exchange market, relative to another currency or a “basket” of currencies? A) European currency unit B) fixed currencies C) floating currencies D) dirty float currency […]
A decrease in collection efforts by a firm will result in ________ in sales volume, ________ in the investment in accounts receivable, ________ in bad debt expenses, and ________ in collection expenditures. A) an increase; an increase; an increase; a decrease B) an increase; a decrease; an increase; an increase C) an increase; a decrease; […]
What is the name of the value of the real resources that the central bank obtains through the creation of base money? A) seigniorage B) sterilized intervention C) dollarization D) target zone ANSWER Answer: A
An increase in accounts receivable turnover for a firm due to an increase in collection efforts will ________. A) decrease the firm’s marginal investments in accounts receivable B) increase the firm’s marginal investments in accounts receivable C) decrease the firm’s collection expense D) increase the firm’s bad debt expense ANSWER A
Which account should NOT be included in the asset section of a central bank balance sheet? A) currency in circulation B) official international reserves C) domestic credit D) government bonds ANSWER Answer: A
The most stringent step in the collection process is ________. A) letters B) personal visits C) collection agencies D) legal action ANSWER D
The first step in the collection of overdue accounts is ________. A) a letter B) contacting a collection agency C) legal actions D) a personal visit ANSWER A
2/15 net 45 translates as ________. A) 15 percent cash discount if paid in 2 days, net 45-day credit period B) 45 percent of account due in 15 days, payment prior to day 15 receives a 2 percent discount C) 2 percent cash discount if paid prior to 15 days, if customer does not take […]
A technique that provides an analyst with the information concerning the proportion of each type of account that has been outstanding for a specified period of time is called ________. A) credit analysis B) credit scoring C) aging of receivables D) the economic order quantity model ANSWER C
Which of the following is true of cash discount? A) It increases bad debts because after availing discounts all customers may not pay. B) It decreases the investment in accounts receivable and increases the per unit profit. C) It helps to speed up collections without putting pressure on customers. D) It reduces sales because the […]
