Northwest Packing Inc. estimates the following expenditures: total shipping costs of $1,100; wages paid to workers of $9,600; overhead costs of $4,300; raw materials of $5,000; and, dividends and interest paid of $2,200. What is the total production cost from all of these costs? A) $22,200 B) $21,100 C) $20,100 D) $20,000 ANSWER […]
In accounting, the recording of the cost of goods sold occurs at the time of the sale, but the cash flow may take place over an extended time period. Indicate whether the statement is true or false. ANSWER Answer: TRUE
When implementing the cash management strategies, a firm should avoid damaging a firm’s credit rating by overstretching accounts payable. Indicate whether the statement is true or false ANSWER FALSE
Once all the expenditures and receipts are determined, a financial manager can determine the probability of cash excess or cash shortfall in upcoming periods. Indicate whether the statement is true or false. ANSWER Answer: TRUE
The sales for January, February, and March are $50,000, $80,000 and $120,000, respectively. For any particular month of sales, the following percentages are received over time in cash: 40% in cash from that same month of sales; 50% in cash from the previous month’s sales; and, 10% in cash from the sales from two months […]
A financial manager needs to know if any of the credit sales will not be paid by customers. This situation will entail a reduction in the estimate of the cash flow due to “bad debts.” Indicate whether the statement is true or false. ANSWER Answer: TRUE
The sales for January, February, and March are $2,000, $6,000 and $10,000, respectively. For any particular month of sales the following percentages are received over time in cash for any given month: 50% in cash from that same month of sales; 30% in cash from the previous month’s sales; and 20% in cash from the […]
Investment banks form a temporary alliance, called a , to underwrite a bond issue. a. selling group b. syndicate c. coalition d. pricing association ANSWER B
For estimating cash budget timing, the sale of equipment might occur in one month and the tax consequence in another month. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Sales from a company’s products and services are the only source of cash inflow. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Although sales from a company’s products and services will usually be the main source of cash inflow, other activities can generate cash receipts. For example, companies can […]
