Exam 22: Management of Short-Term Assets: Liquid Assets and Accounts Receivable

XYZ Ltd begins with a cash balance of $600 000 and its cash outflows exceed its inflows by $100 000 each week.Calculate how long the supply of cash would last.

A major benefit of granting credit to customers is a reduction in the cost of bad debts.

Which of the following statements with regards to a company that wishes to invest its idle cash balances in the commercial bill market is false?

Treasury management involves decisions about the composition and level of a company's liquid assets.

Given forecasts of total receipts,total payments and the minimum required balance,the forecast cash surplus is:

Accounts where payment has not been made by the due date are known as:

If XYZ Ltd begins with a cash balance of $300 000 and its cash outflows exceed its inflows by $100 000 each week,what is its average weekly cash balance if,when it runs out of cash,it converts short-term securities to $300 000 cash?

From the following data,estimate the amount of cash to be collected in July. It is expected that cash sales in any single month will represent 30 per cent of sales for that month and the remaining cash is to be collected in the following month.

Which budget provides a forecast of the amount and timing of the cash receipts and payments that will result from the company's operations over a period of time?

Asset liquidity can be best described as:

The conventional classification of motives often attributed to Keynes divides the motives into:

Which of the following statements about a cash budget is true?

Management of interest-rate risk involves:

According to the precautionary motive,businesses hold liquid assets because:

Assuming that ABC Corporation runs two different departments to handle cash outflows and cash inflows,what is the cost to the company of decentralised liquidity management if $100 000 is required to purchase plant and on the same day $175 000 will be received as payment from a customer,if the time period is one month,and the borrowing and lending rates are 15 per cent and 10 per cent,respectively?

According to the transaction motive,businesses hold liquid assets because:

The sale of a company's accounts receivable to a financial institution is known as ____________.

From the following data,estimate the amount of cash to be collected in July. Assuming that the collection pattern is as follows: 10 per cent of sales is collected in the same month,50 per cent is collected the following month,30 per cent is collected two months following the sale and 10 per cent is not collected at all.

Which of the following statements about investment of idle cash balances in longer-term (but not long-term)fixed-period investments is false?

The __________ forecast is the most important factor affecting the accuracy of the cash receipts budget.