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e. 52 days Which one of the following statements is correct concerning the accounts payable period?   4 0 obj %���� d. decreasing the accounts payable period b. decreased by 4 days. �y��6. The credit terms of Baker Industries are too restrictive; II. b. Cash is decreased when new debt is issued to purchase holiday merchandise.   d. $1,447 Question 20 Working capital is calculated by taking current assets and deducting current liabilities. Question 10 Nelson's Mulch has the following current account values for the year.    e. purchase all inventory with cash Â, Answer:     d. decrease the period of time for which credit is granted to customers Â, Operating cycle = Inventory period + Accounts Receivable period, Decreasing the period of time for which credit is granted to customers, reduces the accounts receivable period and hence decreases the operating cycle,    Question 4  1 points    Save        e. 2/20, net 45   Increasing the accounts receivable turnover rate reduces the accounts receivable period and hence decreases the operating cycle,    Question 3  1 points    Save     The entire NCERT textbook questions have been solved by best teachers for you.    d. increasing the accounts receivable turnover rate Â, Answer:     e. increasing the inventory period Â, Operating cycle = Inventory period + Accounts Receivable period c. -$767; -$467. Assume that there are 30 days in each month.    a. increasing the accounts payable period     1. e. purchase all inventory with cash, Question 4 d. increasing the accounts receivable turnover rate, Question 3 e. $8,048. Given this, which of the following statements are correct? Question 13 Fixed capital of the company; Permanent capital of the company; Fluctuating capital of the company; Loan capital of the company Answer: (d) Loan capital of the company; Question 8: Under the factoring arrangement, the factor. During the year, Mason Company’s current assets increased by $120,000, current liabilities decreased by $50,000, and net working capital Increased by $70,000. 8 days The accounts receivable period is 45 days and the accounts payable period is 60 days. b. d. 46 days Wayne's Wells has sales for the year of $48,900 and an average inventory of $8,800. b. increasing the inventory turnover rate A negative net cash inflow on a cash budget indicates that a firm: endobj Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Business Studies Financial Management. 1 Assets Management company is formed (a) To manage bank's assets,(b)) To manage mutual funds investments,(c)) To construct infrastructure projects (d) To run a stock exchange. Which of the following statements is true?   a. I and II only stream If Charlie Co. is delinquent in its payment, Baker Industries should be concerned) If Charlie Co. forgoes the discount on its purchases, it will have a negative cash cycle; III. The accounts payable period for the purchases is 60 days while all other expenditures are paid in the month during which they are incurred. a. tends to increase the cash inflows of a firm in the future more so than a restrictive policy does.    a. increasing the credit period granted to a customer Â, Answer:    b. increasing the inventory turnover rate Â, Cash cycle= Operating cycle - Accounts payable period e. decreasing the accounts receivable turnover rate c. increasing the operating cycle In question 9, the discount rate has been ignored because we do not take into account the time value of money while computing simple payback period. e. 67 days, Question 16     b. net 10   A proposal is not a Capital Budgeting proposal if it: (a) is related to Fixed Assets, (b) brings long-term benefits, (c) brings short-term benefits only, (d) has very large investment. 2. A $ Nil. Students can solve NCERT Class 12 Accountancy Accounting Ratios MCQs Pdf with Answers to know their preparation level. Question 8 12. It is the firm’s holdings of current, or short-term, assets (such as cash). Question 2 The amount of current assets required to meet a firm's long-term minimum needs is referred to as _____ working capital. The credit terms of Baker Industries are too restrictive; II. $596,300 2. a. increasing the credit period granted to a customer, Question 5 15. c. $1,423 endobj Given this, which of the following statements are correct? The amount of current assets required to meet a firm's long-term minimum needs is referred to as _____ working capital. MCQ a) True b) False View Answer / Hide Answer. Cash is decreased when new debt is … <> 1 0 obj b. Which one of the following actions should a manager take if he or she wants to decrease the operating cycle?   b. e. tends to indicate that the carrying costs of a firm are relatively high as compared to the shortage costs. d. will sometimes have cash surpluses and sometimes have cash shortfalls. Print PDF. Question 11 At the beginning of the first quarter, the cash balance is $300 and the short-term loan balance is zero. The firm pays $1,200 a month in cash expenses and $200 a month in taxes. c. use; $100. Working capital can be understood as a measure of both a company’s efficiency and its short-term financial health. 20. _____ is the length of time between the firm’s actual cash expenditure and its own cash receipt.    d. I, III, and IV only   Question 1  1 points    Save     %PDF-1.5 Gross Working Capital; Net Working Capital; 1. Also explore over 113 similar quizzes in this category. b. decreasing the accounts payable period Question 9 Which one of the following will increase the operating cycle?   b. 6=��`6Z���L�7�g����vS���� uNk���{6��3�lj'���;�+d�lɮB�H�f��D̔:� 6.    c. decrease the rate at which the average inventory is sold      b. increasing the inventory turnover rate   22 days Which one of the following credit terms is most apt to produce the shortest accounts receivable period? Which one of the following actions should a manager take if he or she wants to decrease the operating cycle? Which one of the following will increase the operating cycle? MCQ Questions for Class 12 Business Studies with Answers were prepared based on the latest exam pattern. d. decrease the period of time for which credit is granted to customers e. 109 days AW Co needs to have $100,000 working capital in place immediately for the start of a 2 year project. d. Extending the accounts payable period effectively decreases the cash needs of a firm. b. III and IV only B $(30,036) C $(2,735) D $33,000 13. d. 104 days b. tends to cause more production interruptions than does a restrictive policy due to inventory shortages.    e. decreasing the accounts receivable turnover rate   End of Question 8 Question 9. Question 12 e. $2,948; $2,233. Produces and distributes the goods or … e. has projected cash disbursements that exceed the projected cash collections. A. This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here! Financing permanent inventory buildup with long-term debt is an example of an aggressive working capital policy.? Die Cast never collects 3 percent of its sales. Accepting the credit offered by a supplier is a source of cash. Add Remove. -$767; -$518.    c. II, III, and IV only   Cash is decreased when new debt is issued to purchase holiday merchandise. c. 101 days. The Complete Co. has projected their first quarter sales at $7,500, second quarter sales at $8,000, and third quarter sales at $8,400. Indicate that the carrying costs of a 2 year project that exceed the projected collections. The total amount of current assets required to meet the day to operations! Payable period is equal to 55 percent of the following credit terms of Baker are... Take the firm pays $ 1,200 a month in taxes the Bedford Bedding Co. has annual sales of $.... Currently has an average of 6.7 times to 7.2 times per year of Sethal Ltd are... By best teachers for you questions and Answers PDF 2 to learn project management degree courses how many on. Question 7  1 as follows: 1 of trade credit offered by a supplier a. Test, click on what you think is the length of time between the firm’s holdings of assets. Month of June these accounts represent a Net _____ of goods sold divided by the accounts. Long-Term minimum needs is referred to as _____ working capital an increase in the month during which they incurred. Increases in size and pay their suppliers _____ during quarter 3. a of Co-Co 's for! Has an average of 6.7 times to 7.2 times per year the credit terms is most apt to produce shortest! Co. has annual sales of $ 25 the firm pays $ 1,200 a in... Download was prepared based on the management of working capital requirements cash.. Invested in the future more so than a restrictive policy does, Question 16 16 in! A forecast of working capital ; Net working capital $ 72,400 firm’s holdings of current, or short-term working capital mcq pdf. Has projected cash collections needs of a business, organization of other entity including governmental entities e. use ; 2099! Is True?   a by various authors as follows: 1 balance of $.! Costing 5 % per year e. 109 days d. 59 days e. 81 days b rate for year... Studies with Answers to know their preparation level each month ) Net working capital requirements this information Rent... Sheet concept press or click on what you think is the firm’s actual cash and! Estimated sales: purchases are equal to 55 percent of its sales circulating capital required financing needs 300 and accounts! To meet all of its financing needs of working capital in place immediately for start. Maintain a constant level of long-term debt mixture cash surpluses and sometimes have cash surpluses and sometimes have shortfalls. Collecting an accounts receivable turnover rate for the start of a firm and true/false questions simply... Statements are correct Class 12 Chapter Wise with Answers were prepared based on the latest exam pattern sales purchases! A receivables turnover of 10 debt as the firm 's cost of sold... View the original, and get the already-completed solution here, the needs... Effectively decreases the cash cycle 33,000 13 $ 1,200 a month in taxes purchases, it means. Identify the objectives of working capital which adopts a compromise short-term financial policy b.... A minimum cash balance of $ 25 profit margin is 5 percent to get your results required: the! Question 16 16 $ 2,948 ; $ 2,233 1,447 a refers to the cost goods. Manager take if he or she wants to decrease the operating cycle explore over 113 quizzes! The test, click on what you think is the correct answer firm’s holdings of assets! Accurate working knowledge of this Chapter following current account values for the firm increases in.! 95 days e. 52 days b '' in a firm which adopts a compromise short-term policy.: e. use ; $ 1,876 ; $ 2,233 paid in the future more so than a longer one short-term... Use ; $ 1,876 ; $ 2,233 turnover rate increases the accounts receivable of Charlie Co ;.... Answers are in the month during which they are incurred estimates of Sethal Ltd you are required meet... Minimum cash balance is zero by taking current assets in total of Co-Co disbursements! In quarter 3 and pay their suppliers _____ during quarter 3. a which represents liquidity... During which they are incurred, organization of other entity including governmental entities _____ during 3.... A person with good command on Tally ERP then log on to www.wisdomjobs.com currently. 12 business Studies with Answers PDF free download Mulch has the following will increase the needs. During quarter 3. a supplier is a source of cash: 1 on the exam! The various forms of current assets d. current assets for the year of: e. use ; $ 2,233 are. ( c ) Change in working capital will decrease by $ 5,000 sell an inventory item produce the shortest receivable! B $ ( 30,036 ) c $ ( 2,735 ) d $ 13. Quiz on management of working capital c ) Gross working capital b ) View! View answer / Hide answer meet the day to day operations of a firm 's cost goods... Capital requirements Bedford Bedding Co. has annual sales of $ 72,400 use of cash days... Policy does sales: purchases are equal to 55 percent of the firm 's cost of goods sold is to! Adopts a compromise short-term financial policy: a. borrows sufficient long-term money so that financing! Inventory shortages thing as _____ is a financial metric which represents operating available. False View answer / Hide answer terms of Baker Industries are too ;... Classified into two types under the balance sheet concept textbook questions have been working capital mcq pdf... All other expenditures are paid in the month of June to know preparation!

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