BUSI 320 WEEK 1 EXAM Questions and Answers
Verified Solutions Latest Update
Question 1.
much ___ is anticipated over the ensuing time period.
Correct Answer: Profit The largest expense associated with a merchandising firm is
its cost of goods sold `it is crucial that
a firm ensure that adequate cash is available to ___ Meet maturing obligations.
Question 2.
T/f the generation of sales and profits does not necessarily ensure there will be
adequate
cash on hand to meet financial obligations as they come due
Correct Answer: True
Question 3.
The firm has projected sales of $30,000 in June, $25,000 in July, and $20,000 in
August. 20% of sales are collected in the month of the sale and 80% are collected in
the
month following the sale. What are cash receipts in August?
Correct Answer: $24,000 Reason: 20% of aug 4,000 + 80% of July 20,000 = 24,000
The primary considerations for cash
payments are monthly costs associated with -interest payments and taxes
-inventory manufactured during
the period -general and administrative expenses
Question 4.
A company has forecasted sales of $50,000 in January, $40,000 in February, and
$60,000 in
March. All sales are on credit with 50% collected in the month of the sale, 30%
collected in the
month following the sale, and the remaining amount collected in the second month
after
the sale. After collections are made in the month of March, what will the
accounts receivable balance be?
Correct Answer: $38,000 Cash payments may be necessary for all of the following
except depreciation expenses The
difference between monthly cash receipts and payments is referred to as ____ net
cash flows
Question 5.
Which of the following is a projection of future assets, liabilities, and stockholders'
equity levels?
Correct Answer: Pro forma balance sheet
Verified Solutions Latest Update
Question 1.
much ___ is anticipated over the ensuing time period.
Correct Answer: Profit The largest expense associated with a merchandising firm is
its cost of goods sold `it is crucial that
a firm ensure that adequate cash is available to ___ Meet maturing obligations.
Question 2.
T/f the generation of sales and profits does not necessarily ensure there will be
adequate
cash on hand to meet financial obligations as they come due
Correct Answer: True
Question 3.
The firm has projected sales of $30,000 in June, $25,000 in July, and $20,000 in
August. 20% of sales are collected in the month of the sale and 80% are collected in
the
month following the sale. What are cash receipts in August?
Correct Answer: $24,000 Reason: 20% of aug 4,000 + 80% of July 20,000 = 24,000
The primary considerations for cash
payments are monthly costs associated with -interest payments and taxes
-inventory manufactured during
the period -general and administrative expenses
Question 4.
A company has forecasted sales of $50,000 in January, $40,000 in February, and
$60,000 in
March. All sales are on credit with 50% collected in the month of the sale, 30%
collected in the
month following the sale, and the remaining amount collected in the second month
after
the sale. After collections are made in the month of March, what will the
accounts receivable balance be?
Correct Answer: $38,000 Cash payments may be necessary for all of the following
except depreciation expenses The
difference between monthly cash receipts and payments is referred to as ____ net
cash flows
Question 5.
Which of the following is a projection of future assets, liabilities, and stockholders'
equity levels?
Correct Answer: Pro forma balance sheet
