1. (TCO 2) Select any actions that do not affect the cash account. Select all that apply: (Points : 3) Goods are sold on credit An interest payment on a notes payable is made Raw materials are purchased and paid for with credit A new machine is purchased and paid for with the business line of credit Question 2.2. (TCO 2) Which one of the following will increase the operating cycle? (Points : 3) increasing the accounts payable period decreasing the accounts payable turnover rate decreasing the cash cycle increasing the accounts receivable turnover rate increasing the inventory period Question 3.3. (TCO 2) Assume Green Leaf Nursery anticipated sales of $630 in the first quarter. Accounts receivable at the beginning of the year was $373. Assuming a collection period of 60 days, which is the approximate cash collection for the quarter? (Points : 3) $420 $607 $590 $580 None of the above Question 4.4. (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: (Points : 3) 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 5.5. (TCO 2) Which of the following statements is false? Select all that apply: (Points : 3) The optimal credit poli
cy 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 6.6. (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? (Points : 3) $52,200 $39,150 $51,678 None of the above Question 7.7. (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? (Points : 3) $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 8.8. (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 average inventory? (Points : 3) 310 units 300 units 150 units 155 units None of the above Question 9.9. (TCO 2) The _________ is the time it takes to acquire and sell inventory. (Points : 3) cash cycle operating cycle inventory period accounts receivable period accounts payable period Question 10.10. (TCO 2) List three ways in which the firm can expedite payments and accounts receivables. (Points : 3)