1.
The Juice Company may obtain the funds by not taking
discounts and thus increasing its accounts payable. The term of
credits are 2/20, net 40. The cost of trade credit of this funds
is____________
None of the choices
72%
36.72%
40%
30%
2. These are examples of spontaneous financing, except:
Notes payable- trade
Utilities payable
Accrued salaries
Short-term bank loans
Accounts payable
3. It is an interest rate that is calculated in the context of accounts
payable management.
None of the choices
Cost of capital
Discount Interest
Simple Interest
Cost of trade credit
4. Which one of the following statements is correct concerning the
accounts payable period?
An increase in the accounts payable period will increase the operating
cycle, all else equal.
Managers generally prefer a shorter accounts payable period than a
longer one
The accounts payable period is equal to the net cost of purchases
divided by the average accounts payable.
Increasing the accounts payable turnover rate increases the accounts
payable period.
5. The juice company may obtain the funds by not taking discounts
and thus increasing its accounts payable. The terms of credits
are 1/10, net 40. The cost of trade credit of this funds is _______
12.12%
6. Cash management includes the following, except:
Investing idle cash
Disbursing restricted cash
Cash Planning
Managing cash flows
7. These are the objectives of cash management, except:
To meet current obligations
To meet contingencies
To maximize funds committed to cash balance
To meet installment commitments under long term contracts
To make advantage of speculative gains
8. Statement 1. Cash management must aim to reduce the
required level of cash but minimize the risk of being unable to
discharge claims against the company as they arise.
Statement 2. If cash balance is too high there is opportunity cost
of not properly invested to earn profits.
Statement 3. The cost of excess cash and danger of cash
deficiency should be matched to determine the optimum level of
cash balances.
All statements are true
Only two statements are true
Only one statement is true
All statements are false
9. Statement 1. Marketable securities are liquid instruments that
can be quickly converted into cash at a reasonable price.
Statement 2. Cash is the most liquid account in the current
assets.
Statement 3. If the liquidity is high, the profitability is low.
Only one statement is true
All statements are false
All statements are true
Only two statements are true
10. Statement 1. Cash management is concerned with
minimizing unproductive balances, investing permanently cash
advantageously and to making the best possible arrangement to
meeting planned on the firm's cash.
Statement 2. Cash is the most significant and the least
productive asset that a firm holds.
Statement 3. There are general motives of holding cash,
namely: Transaction and contingency motive.
Only one statement is true
All statements are true
All statements are false
Only two statements are true
11. Roles and functions in cash management include the
following, except:
Payable management
Receivable management
Capital management
Inventory management
12. Statement 1. Cash management must aim to reduce the
required level of cash but minimize the risk of being unable to
discharge claims against the company as they arise.
Statement 2. If cash balance is too high there is opportunity cost
of not properly invested to earn profits.
Statement 3. The cost of excess cash and danger of cash
deficiency should be matched to determine the optimum level of
cash balances.
All statements are true
Only two statements are true
Only one statement is true
All statements are false
13. Rank the order of priority based on the three primary criteria
for selecting appropriate marketable securities to meet firm's
anticipated short-term cash needs:
1.
Liquidity;
2. Yield;
3. Safety
3, 1 and 2
14. These types of inventory control systems tract inventory using
physical inventory counts.
Merchandise Inventory System
None of the choices
Perpetual Inventory System
Periodic Inventory System
15. This indicates the effectiveness of the inventory management
practices of the firm.
Payable turnover
Age of inventory
Inventory turnover
Receivable turnover
16. This allows for uncertainty of estimates used in model and
possibility of non-uniform usage.
Safety stock
17.
Inventory maintenance costs include the following, except:
Cost of capital
18. EEE COMPANY buys 5,000 microchips annually for its
computer manufacturing business. The chips come in lots of 50
per box. The cost of placing an order is P9,000, while the cost
of receiving, including handling charges, is P18,000. Annual
carrying costs are 3% of the purchase price of P25,000 per chip.
What is the total inventory costs based on the EOQ?
P450,000
P337,500
P225,000
P675,000
None of the choices
19. A costs that pertains to storage, handling, loss in value due to
obsolescence and physical deterioration, taxes, insurance,
financing
Carrying costs
20. Statement 1. Carrying costs increase with increases in
average inventory levels and therefore argue in favor of low
levels of inventory in order to hold these costs down
Statement 2. Ordering costs decrease with increases in average
inventory levels and therefore the firm wants to carry high levels
of inventory so that it does not have to reorder inventory as often
as it would if it carried low levels of inventory.
Both statements are true
21. Which of the following are the costs of maintaining inventory?
1. Carrying costs
2. Ordering costs
3. Stock out costs
4. Excess costs
Items 1,2 and 3
22. Which of the following are the inventory control systems?
1. JIT System
2. 3 Bin System
3. XYZ System
4. Outsourcing System
5. Computerized Inventory
All of the above items except item 3
23. A system wherein the material, or the products are produced
and required just a few hours before they are put to use.
Just In-Time System
ABC Inventory control system
Three bin system
Outsourcing system
24. The receivables merely serve as collateral in the event of
default
Factoring
Pledging
Assigning
Discounting
25. Lender only acts as supplier of funds so if borrower defaults,
borrower suffers bad-debt loss, not lender
Assigning and Pledging
Pledging and Factoring
None of the Choices
Assigning and Factoring
26. It refers to those decision variables that influence the amount
of trade credit
Credit Transactions
Credit Terms
Credit Policy
Credit Standards
27. Statement 1. In liberal policy, sales increases and as a result,
profit and bad debts also increases and hence the firm faces no
problem of liquidity
Statement 2. In Stringent policy, sales increases and as a
result, profit and bad debts also increases and hence the firm
faces no problem of profitability
Only statement 1 is true
Both statements 1 and 2 are true
Both statements 1 and 2 are false
Only statements 2 is true
28. Statement 1. Opportunity cost is the profit lost when one
alternative is selected over another.
Statement 2. An administrative cost is an expense incurred in
controlling and directing an organization, but not directly
identifiable with financing, marketing, or production operations.
Both statements 1 and 2 are false
Both statements 1 and 2 are true
Only statement 1 is true
Only statement 2 is true
29. A lender's opinion of a borrower's general trustworthiness,
credibility and personality
Capacity
Condition
Collateral
Character
Capital
30. Statement 1. In pledging of receivables, lender advances
money to borrower up to some predetermined percentage of
accounts receivable and then collects directly from customer
account.
Statement 2. In factoring of receivables, bank or other lender
makes loan of some percentage of value of receivables but does
not take possession of them.
Statement 3. In assigning of receivables, lender buys accounts
receivables outright from borrower at discount from face value
and assumes burden of collecting receivables.
All statements are false
Only two statements are false
Only one statement is false
All statements are true
31. It refers to those decision variables that influence the amount
of trade credit
Credit Transactions
Credit Terms
Credit Policy
Credit Standards
32. A lender's opinion of a borrower's general trustworthiness,
credibility and personality
Capacity
Condition
Collateral
Character
Capital
33. The amount of money invested by the business owner or
management team
Character
Collateral
Capacity
Condition
Capital
34. It is a promise from a third party (usually a bank) for payment
in the event that certain conditions are met.
Letter of credit
35. A lien on specifically identified personal property (assets other
than real estate) backing a loan
Chattel Mortgage
36. It is a promise from a third party (usually a bank) for payment
in the event that certain conditions are met.
Letter of credit
37. A lien on specifically identified personal property (assets other
than real estate) backing a loan
Chattel Mortgage
38. Which of the following would be consistent with a
conservative approach to financing working capital?
Financing short-term needs with long-term debt.
39. All else equal, which one of the following will decrease the
cash cycle?
increasing the operating cycle
increasing the credit period granted to a customer
decreasing the accounts payable period
increasing the inventory turnover rate
decreasing the accounts receivable turnover rate
40. How will the total amount of a company's working capital
change when a P10,000 account receivable is collected?
The total remains the same
Can not be determined
The total decreases by P10,000
The total increases by P10,000
41.
Which one of the following will decrease the operating cycle?
increasing the inventory period
decreasing the accounts payable period
increasing the accounts receivable turnover rate
increasing the accounts payable period
Increasing the cash cycle
42. How will a company's liquidity change when it pays the
accounts payable from customers?
Its Liquidity Decreases
43. Which one of the following actions should a manager take if
he or she wants to decrease the operating cycle?
decrease the period of time for which credit is granted to
customers
44. The amounts needed to compute a company's working
capital come from which of the following financial statements?
Balance sheet
45.
Which of the following statements is true?
Collecting an accounts receivable is a use of cash
All of the choices
Accepting the credit offered by a supplier is a source of cash
Increasing the use of trade credit offered by a supplier is a use
of cash
Cash is decreased when new debt is issued to purchase holiday
merchandise.
46. The Winters Co. has annual sales of P918,700. Cost of goods
sold is equal to 55 percent of sales. The firm has an average
accounts payable balance of P72,400. How many days on
average does it take The Winters Co. to pay its suppliers?
52 days
47. The accounts receivable turnover rate for the Bedford
Bedding Co. has gone from an average of 6.7 times to 7.2 times
per year. The days in receivables has:
Decreased by 4 days
48. Wayne's Wells has sales for the year ofP P48,900 and an
average inventory of P8,800. The cost of goods sold is equal to
60 percent of sales and the profit margin is 5 percent. How many
days on average does it take the firm to sell an inventory item?
109 days
49. The Sun Lee Co. has a receivables turnover rate of 11.5, a
payables turnover rate of 9.8, and an inventory turnover rate of
13.6. What is the length of the firm's cash conversion cycle?
22 days
50. Robert's International currently has an inventory turnover of
15, a receivables turnover of 18, and a payables turnover of 10.
How many days are in the cash cycle?
8 days
81 days
22 days
74 days
45 days
51. AAA COMPANY requires 40,000 units of Product Q for the
year. The units will be sold evenly during the year. It costs
P61.25 to place an order. It costs P10 to carry a unit in
inventory for the year. What is the EOQ (in units)?
Answer: 7,000
52.
The following information relates to the DDD COMPANY:
Units required per year
30,000
Cost of placing an order
P400
Unit carrying cost per year
P600
What is the total inventory costs based on the EOQ?
Answer: 120,000
53. On January 1, 2020, XYZ Corp. borrowed money in the bank
P2,000,000, 1-year term, with an interest rate of 10% per
annum. XYZ pledged it's A/R which amounted to P3,000,000.
How much is the maturity value of loan one year after assuming
at a simple interest?
Answer: 2,200,000
2,000,000 x (100% + 10%) = 2,200,000
54. During a recent year, a company's accounts receivable had
an average balance of P60,000 and its sales on credit were
P540,000. Using 360 days in the given year, the company's
receivable period for the year was __________ days
Answer:
55. A company has current assets of Cash of P140,000;
Marketable Securities of P160,000; Accounts Receivable of P
180,000; Inventory of P220,000; and Prepaid Expenses of
P50,000. The total of its current liabilities is P250,000 and the
total amount of its liabilities is P500,000. Given this information,
the company's current ratio is
A company has current assets of Cash of P140,000; Marketable
Securities of P160,000; Accounts Receivable of P 180,000;
Inventory of P220,000; and Prepaid Expenses of P50,000. The
total of its current liabilities is P250,000 and the total amount of
its liabilities is P500,000. Given this information, the company's
current ratio is
3:1 (hindi na ako sure for todays bideo)
56.
Assume the following data of XYZ Company:
Cash sales
P 5,500,000
Credit sales
3,500,000
A/R, beg
370,000
A/R, end
330,000
Inventory
2,500,000
Compute the receivable period using 360 days in a year.
Answer is _______ days
Answer:
57. You are consulted by the President of SAN MIGUEL
CORPORATION to analyze the liquidity for the fiscal year ended May
31, 2019. Consider some of the following accounts below at year end:
Cash
P 10,000,000
Marketable securities
20,000,000
Accounts receivable
50,000,000
Merchandise inventory
120,000,000
Accounts payable
8,000,000
Notes payable-trade
40,000,000
Additional data shows at year end May 31, 2019:
Beginning balances of account receivables and merchandise
inventory
were P40,000,000 and P130,000,000, respectively;
Sales were P4,500,000,000 while the cost of sale were
1,250,000,000.
What is the inventory turnovers? Answer: __ times
Answer: 10
58. You are consulted by the President of Philadelpa Sixer Co. to
analyze the liquidity for the fiscal year ended May 31, 2019. Consider
some of the following accounts below at year end:
Cash P 10,000,000
Marketable securities 20,000,000
Accounts receivable 50,000,000
Merchandise inventory 120,000,000
Accounts payable 8,000,000
Notes payable-trade 40,000,000
Additional data shows at year end May 31, 2019
1. Beginning balances of account receivables and merchandise
inventory were: P40,000,000 and P130,000,000, respectively;
2. Sales were P4,500,000,000 while the cost of sale were
1,250,000,000.
What is the NET WORKING CAPITAL at May 31,2019?
Answer: 150,000,000
59. A company has current assets of Cash of P80,000; Marketable
Securities of P120,000; Accounts Receivable of P80,000; Inventory of
P60,000; and Prepaid Expenses of P20,000. The total of its current
liabilities is P120,000 and the total amount of its liabilities is P290,000.
Given this information, the company's quick ratio is:
__:1
60. On January 1, 2020, XYZ Corp. borrowed money in the bank
P2,000,000, 1-year term, with an interest rate of 12% per annum.
XYZ pledged it's A/R which amounted to P3,000,000. How much is
the cash proceeds of loan on January 1, 2020 assuming at a
discounted interest? P____________ (do not provide space in
writing the amount)
Answer: 1,760,000