Question 1

If inventory turnover changes from 4 times a year to 5 times a year,this means:

Accepted Answer

A)  on average, it is taking longer to sell inventory. 
B)  on average, inventory is being sold faster. 
C)  inventory turnover is too slow. 
D)  inventory turnover is faster than the industry average. 
A)  on average, it is taking longer to sell inventory. 
B)  on average, inventory is being sold faster. 
C)  inventory turnover is too slow. 
D)  inventory turnover is faster than the industry average.

Question 2

An assumption of the economic order quantity model is:

Accepted Answer

A)  instantaneous delivery of orders. 
B)  demand is constant over the planning period. 
C)  constant carrying and ordering costs. 
D)  all of the above. 
A)  instantaneous delivery of orders. 
B)  demand is constant over the planning period. 
C)  constant carrying and ordering costs. 
D)  all of the above.

Question 3

Which of the following is not a useful measure of the quality of accounts receivable?

Accepted Answer

A)  Bad debts as a percentage of sales. 
B)  The amount owed by the debtor. 
C)  Average collection period. 
D)  Aging of debtors' accounts. 
A)  Bad debts as a percentage of sales. 
B)  The amount owed by the debtor. 
C)  Average collection period. 
D)  Aging of debtors' accounts.

Question 4

Which of these is not considered a cost of holding inventory?

Accepted Answer

A)  Opportunity cost of having funds tied up in inventory. 
B)  Risk of bad debts. 
C)  Cost of storage and handling. 
D)  Risk of obsolescence. 
A)  Opportunity cost of having funds tied up in inventory. 
B)  Risk of bad debts. 
C)  Cost of storage and handling. 
D)  Risk of obsolescence.

Question 5

Flash Enterprises usually takes 60 days to pay its suppliers.In order to encourage prompt payment,supplier Y offers Flash Enterprises a 1.5% discount for payment within 10 days.What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Accepted Answer

A)  11%. 
B)  18.25%. 
C)  9.1%. 
D)  1.5%. 
A)  11%. 
B)  18.25%. 
C)  9.1%. 
D)  1.5%.

Question 6

Which statement concerning trade credit is true?

Accepted Answer

A)  One business's trade creditor is the other's trade debtor. 
B)  In a period of inflation, it is better to pay off goods bought on credit faster. 
C)  In most businesses, an extra charge is made to those who choose to pay on credit. 
D)  All of the statements are true. 
A)  One business's trade creditor is the other's trade debtor. 
B)  In a period of inflation, it is better to pay off goods bought on credit faster. 
C)  In most businesses, an extra charge is made to those who choose to pay on credit. 
D)  All of the statements are true.

If inventory turnover changes from 4 times a year to 5 times a year,this means:

An assumption of the economic order quantity model is:

Which of the following is not a useful measure of the quality of accounts receivable?

Which of these is not considered a cost of holding inventory?

Flash Enterprises usually takes 60 days to pay its suppliers.In order to encourage prompt payment,supplier Y offers Flash Enterprises a 1.5% discount for payment within 10 days.What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Which statement concerning trade credit is true?

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Costvolumeprofit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

Financing the Business

Filters

Exam 13: The Management of Working Capital

If inventory turnover changes from 4 times a year to 5 times a year,this means:

An assumption of the economic order quantity model is:

Which of the following is not a useful measure of the quality of accounts receivable?

Which of these is not considered a cost of holding inventory?

Flash Enterprises usually takes 60 days to pay its suppliers.In order to encourage prompt payment,supplier Y offers Flash Enterprises a 1.5% discount for payment within 10 days.What is the annual percentage discount forgone if Flash Enterprises does not take up the discount offer?

Which statement concerning trade credit is true?

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Costvolumeprofit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

Financing the Business

Filters