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1. (TCO 2) Select any actions that decrease the c...




1. (TCO 2) Select any actions that decrease the cash account. Select all that apply: (Points : 3) Goods are sold on credit An interest payment on a notes payable is made The electric bill is paid Dividends are paid to shareholders 2. (TCO 2) Which one of the following will decrease the operating cycle? (Points : 3) increasing the days' sales in inventory decreasing the accounts payable period decreasing the cash cycle increasing the accounts receivable turnover rate decreasing the accounts payable turnover rate 3. (TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter? (Points : 3) $550 $630 $250 $170 None of the above 4. (TCO 2) Which one of the following practices will reduce a firm's collection float? (Points : 3) utilizing zero-balance accounts depositing checks weekly rather than daily requiring all customers pay by check rather than with cash installing a lockbox system paying all bills five days sooner 5. (TCO 2) Which of the following statements is true? Select all that apply: (Points : 3) The optimal credit policy minimizes the total cost of granting credit. Firms should avoid offering credit at all cost. An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount. The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit. Capacity refers to the ability of a firm to meet its credit obligations out its operating cash flows. The optimal credit policy is the policy that produces the largest amount of sales for a firm. 6. (TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 2/25, net 40. How much should you remit if you take the discount? (Points : 3) $52,200 $51,156 $51,678 None of the above 7. (TCO 2) Auto Parts sells 1,200 electric parts per week and then reorders another 1,200 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $750, what is the total carrying cost and the restocking cost, respectively? (Points : 3) $2,400 and $39,900 $3,200 and $33,800 $2,400 and $39,000 $3,400 and $30,000 None of the above 8. (TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory? (Points : 3) 310 units 300 units 150 units 155 units None of the above 9. (TCO 2) The _________ is the time it takes to acquire and sell inventory. (Points : 3) cash cycle operating cycle inventory period accounts receivable period accounts payable period 10. (TCO 2) List three ways in which the firm can expedite payments and accounts receivables. (Points : 3)


Paper#8457 | Written in 18-Jul-2015

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