Question(TCO 2) Select any actions that decrease the cash account. Select al

(TCO 2) Select any actions that decrease the cash account. Select all that apply:

goods are sold on credit

An interest payment on a notes payable is made

The electric bill is paid

Dividends are paid to shareholders

Question 2. Question :

(TCO 2) Which one of the following actions will decrease the operating cycle?

eliminating all inventory items that are slow sellers

delaying payments to suppliers

paying suppliers faster

increasing the amount of inventory on the shelves

granting customers more time to pay for their credit purchases

Question 3. Question :

(TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in this quarter. Accounts receivable at the beginning of the quarter was $300. Assuming a collection period of 30 days, which is the approximate cash collections amount for the quarter?

$550

$630

$250

$170

None of the above

Question 4. Question :

(TCO 2) Best Environment Engineering wrote a check and mailed it to the Electric Co. When the Electric Co. went to deposit the check, it discovered that the bank was closed due to flooding in the area. It was 5 days before the Electric Co. could deposit the check from Best Environment Engineering. Because the Electric Co.’s bank was closed:

Best Environment’s collection float decreased.

the Electric Co.’s collection float decreased.

Best Environment’s disbursement float increased.

the Electric Co.’s disbursements float increased.

the ledger balance of Best Environment was less than it would have been otherwise.

Question 5. Question :

(TCO 2) Which of the following statements is false? Select all that apply:

The optimal credit policy minimizes the total cost of granting credit.

Firms should avoid offering credit at all cost.

An increase in a firm’s average collection period generally indicates that an increased number of customers are taking advantage of the cash discount.

The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit.

Character refers to the ability of a firm to meet its credit obligations out its operating cash flows.

Question 6. Question :

(TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 1/25, net 40. How much should you remit if you take the discount?

$52,200

$39,150

$51,678

None of the above

Question 7. Question :

(TCO 2) Auto Parts sells 1,200 electric parts per week and then reorders another 1,200 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $750, what is the total carrying cost and the restocking cost, respectively?

$2,400 and $39,900

$3,200 and $33,800

$2,400 and $39,000

$3,400 and $30,000

None of the above

Question 8. Question :

(TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the EOQ?

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