The company can repay its debt or invest if: O a. the opening cash balance plus the cash receipts is less than the cash needed for disbursement in the budget period O b. None of the given answers. O c. the cash needed for disbursement is less than the total of the opening cash balance plus the cash receipts in the budget period O d. there is a cash deficiency in the budget period. O e. total cash available is less than the cash needed for expenditure in the budget period. JS PAGE NEXT PAGE e to search 11:37 ADA dx ENG 22-05-2021 hp REPCUS HAaR 144 iort sc PAA detete end 5. &backspace Tock E P 7 V 8 A home D K enter 50 pause ↑ shift end alt ctri

The company can repay its debt or invest if: O a. the opening cash balance plus the cash receipts is less than the cash needed for disbursement in the budget period O b. None of the given answers. O c. the cash needed for disbursement is less than the total of the opening cash balance plus the cash receipts in the budget period O d. there is a cash deficiency in the budget period. O e. total cash available is less than the cash needed for expenditure in the budget period. JS PAGE NEXT PAGE e to search 11:37 ADA dx ENG 22-05-2021 hp REPCUS HAaR 144 iort sc PAA detete end 5. &backspace Tock E P 7 V 8 A home D K enter 50 pause ↑ shift end alt ctri

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 14MCQ: The percentage of accounts receivable that is uncollectible can be ignored for cash budgeting...

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The percentage of accounts receivable that is uncollectible can be ignored for cash budgeting because a. no cash is received from an account that defaults. b. it is included in cash sales. c. it appears on the budgeted income statement. d. for most companies, it is not a material amount. e. None of these.
An increase in accounts receivable is deducted from net income to obtain operating cash flows because a. cash collections increased due to increasing sales. b. cash collections from customers were less than the revenues reported. c. cash collections decreased due to declining sales. d. cash collections from customers were greater than the revenues reported. e. None of these.
The company may need to borrow money if : a. total cash available is more than the cash needed for expenditure in the budget period . b. the cash needed for expenditure in the budget period trails behind the total cash available . c. the cash needed to pay for expenditures is less than the total of the opening cash balance plus the cash receipts in the budget period d. there is a cash deficiency in the budget period . e . None of the given answers .
A company is expecting a temporary negative cash flow. Discuss the benefits of funding the deficit by arranging an overdraft facility with its bank
Which of the following statements is most correct? a. A cash management system that maximizes collections float while minimizing disbursement float is preferable to one that has lower collections float while increasing disbursement float. b. Other things held constant, a firm will need a smaller line of credit if it can arrange to pay its bills by the 5th of each month than if its bills come due uniformly during the month. c. None of the statements are correct. d. The use of a lockbox is intended to reduce cash theft losses. In the event that if the cost of the lockbox is less than the theft losses avoided, the lockbox should be installed. e. A cash management system that minimizes collections float while increasing disbursement float outperforms one with higher collections float but lower disbursement float.
Which of the following statements is NOT CORRECT? a. The cash budget is useful for estimating potential funding needs, especially for short-term working capital loans. b. Working capital management is critical because it affects financing decisions and the firm's profitability. c. Credit policy affects working capital because it impacts both sales and the time it takes for receivables to be obtained. d. If a company needs to increase its cash flow from operations in the next month or two, it can change its credit policy from 2/10 net 30 to net 60. e. f a company is unsure about the volume of sales, profits, and cash flows for the coming year, it will retain a relatively large amount of cash and marketable securities.
Does no financing activity mean you don't start your budget with an opening cash balance?
As a result of the COVID-19 crisis, company A has decided to sell its receivables to a bank in exchange for cash. What would be the effect of this financial decision on the company's current ratio, quick ratio and cash ratio?
If the total asset is smaller than total liabilities and equity on the balance sheet, what does that mean ( deficit or surplus)? And if it's a deficit why should I add the AFN amount to cash and cash equivalents not to debt! can you clarify this please
When a company has a generous credit policy, cash is tied up in receivables and the company must finance its expansion or the payment of its bills through increased borrowing. What label is given to this cost of selling on credit? Carrying cost Sales returns and allowances cost Bookkeeping cost Bad debit cost
Which of the following methods can NOT be used to improve the firm’s cash conversion cycle? Decrease the firm’s inventory conversion cycle. Decrease the firm’s receivables collection period. Decrease the firm’s payables deferral period. Increase the firm’s payables deferral period.
Which of the following statements is NOT CORRECT? A. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing B. A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, profits, and cash flows during the coming year C. The cash budget is useful to help estimate future financing needs, especially the need for short-term working capital loans. D. If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from 2/10, net 30 to net 60.