Question 1

Most small businesses conduct a thorough credit investigation before selling to a new customer.

Accepted Answer

A) True 
 B)False  False

Question 2

Asset-management accounts are available to small businesses that have at least $1.5 million in annual revenues.

Accepted Answer

A) True 
 B)False  False

Question 3

Generally speaking,most small business owners tend to:

Accepted Answer

A) overestimate cash disbursements. 
B) underestimate cash receipts. 
C) underestimate cash disbursements. 
D) try to count unpaid cash disbursements as cash that can be spent. 
A) overestimate cash disbursements. 
B) underestimate cash receipts. 
C) underestimate cash disbursements. 
D) try to count unpaid cash disbursements as cash that can be spent. C

Question 4

The Fair Debt Collection Practices Act prohibits business owners from:

Accepted Answer

A) harassing people who are past due. 
B) sending invoices the same day the product is shipped. 
C) hiring debt collection attorneys. 
D) referring past due bills to collection agencies. 
A) harassing people who are past due. 
B) sending invoices the same day the product is shipped. 
C) hiring debt collection attorneys. 
D) referring past due bills to collection agencies.

Question 5

The heart of the cash budget is the ________ forecast.

Accepted Answer

A) cash receipts 
B) cash disbursements 
C) sales 
D) receivables 
A) cash receipts 
B) cash disbursements 
C) sales 
D) receivables

Question 6

An important first step in protecting the small business from bad debt losses is a detailed credit application.

Accepted Answer

A) True 
 B)False

Question 7

The first step in preparing a cash budget is to forecast cash receipts.

Accepted Answer

A) True 
 B)False

Question 8

A bank account that technically never has funds in it but is tied to another master account so that when checks are presented for payment the master account is debited,permitting the company to use its own money during the "float" period,is called a(n):

Accepted Answer

A) cash account. 
B) accrual account. 
C) sweep account. 
D) zero balance account. 
A) cash account. 
B) accrual account. 
C) sweep account. 
D) zero balance account.

Question 9

The "big three" of cash management include:

Accepted Answer

A) accounts receivable,overhead,and inventory. 
B) accounts payable,accounts receivable,and taxes. 
C) accounts receivable,accounts payable,and inventory. 
D) accounts receivable,prices,and expenses. 
A) accounts receivable,overhead,and inventory. 
B) accounts payable,accounts receivable,and taxes. 
C) accounts receivable,accounts payable,and inventory. 
D) accounts receivable,prices,and expenses.

Question 10

In a cash budget,credit sales to customers are recorded as soon as the sale is made.

Accepted Answer

A) True 
 B)False

Question 11

If you were having difficulty getting your customers to pay in a timely manner,what could you do to speed payment?

Accepted Answer

•Speed up orders by having customers fax

Question 12

What are the five cash management roles an entrepreneur needs to fulfill in his/her small business?

Accepted Answer

Cash finder,cash pla

Question 13

Once a small business has established a firm written credit policy and communicated it,the next step in building an effective credit policy is to:

Accepted Answer

A) send invoices promptly. 
B) determine what percentage of sales is being written off as bad debt. 
C) create a simple credit application. 
D) create a "tracking file" of events. 
A) send invoices promptly. 
B) determine what percentage of sales is being written off as bad debt. 
C) create a simple credit application. 
D) create a "tracking file" of events.

Question 14

Carrying too much inventory decreases the chances that a business will run out of cash.

Accepted Answer

A) True 
 B)False

Question 15

The first step in managing cash more effectively is:

Accepted Answer

A) having an adequate cash reserve for emergency expenditures. 
B) rapid payment of accounts payable. 
C) speeding up payment of accounts receivable. 
D) understanding the company's cash flow cycle. 
A) having an adequate cash reserve for emergency expenditures. 
B) rapid payment of accounts payable. 
C) speeding up payment of accounts receivable. 
D) understanding the company's cash flow cycle.

Question 16

A cash budget is a forecast of the firm's cash inflows and outflows over a specific time period.

Accepted Answer

A) True 
 B)False

Question 17

What are the big three of cash management? How does each impact the operation of the small business?

Accepted Answer

•Controlling accounts receivable require

Question 18

________ is simply the money owed the firm by customers because they've purchased goods or services on credit.

Accepted Answer

A) Accounts receivable 
B) Accounts payable 
C) Barter 
D) Cash management 
A) Accounts receivable 
B) Accounts payable 
C) Barter 
D) Cash management

Question 19

What are the steps to creating a cash budget (not necessarily in order)?

Accepted Answer

A) Determining an adequate minimum cash balance 
B) Forecasting sales & forecasting cash receipts 
C) Forecasting cash disbursements & estimating the end-of-month cash balance 
D) All of the above 
A) Determining an adequate minimum cash balance 
B) Forecasting sales & forecasting cash receipts 
C) Forecasting cash disbursements & estimating the end-of-month cash balance 
D) All of the above

Question 20

________ measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

Accepted Answer

A) Forecasting 
B) Cash Flow 
C) Cash on hand 
D) None of the above 
A) Forecasting 
B) Cash Flow 
C) Cash on hand 
D) None of the above

Exam 8: Managing Cash Flow

Most small businesses conduct a thorough credit investigation before selling to a new customer.

Asset-management accounts are available to small businesses that have at least $1.5 million in annual revenues.

Generally speaking,most small business owners tend to:

The Fair Debt Collection Practices Act prohibits business owners from:

The heart of the cash budget is the ________ forecast.

An important first step in protecting the small business from bad debt losses is a detailed credit application.

The first step in preparing a cash budget is to forecast cash receipts.

A bank account that technically never has funds in it but is tied to another master account so that when checks are presented for payment the master account is debited,permitting the company to use its own money during the "float" period,is called a(n):

The "big three" of cash management include:

In a cash budget,credit sales to customers are recorded as soon as the sale is made.

If you were having difficulty getting your customers to pay in a timely manner,what could you do to speed payment?

What are the five cash management roles an entrepreneur needs to fulfill in his/her small business?

Once a small business has established a firm written credit policy and communicated it,the next step in building an effective credit policy is to:

Carrying too much inventory decreases the chances that a business will run out of cash.

The first step in managing cash more effectively is:

A cash budget is a forecast of the firm's cash inflows and outflows over a specific time period.

What are the big three of cash management? How does each impact the operation of the small business?

________ is simply the money owed the firm by customers because they've purchased goods or services on credit.

What are the steps to creating a cash budget (not necessarily in order)?

________ measures a company's liquidity and its ability to pay its bills and other financial obligations on time by tracking the flow of cash into and out of the business over a period of time.

Entrepreneurs: the Driving Force Behind Small Business

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Creating a Solid Financial Plan

Building a Guerrilla Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

Ethics and Social Responsibility: Doing the Right Thing

The Legal Environment: Business Law and Government Regulation

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