Quiz 4
Question 1 ________ tell whether or not the small business
will be able to meet its maturing obligations as they come due.
Question 2 The ________ ratio is a conservative measure of a
firm’s liquidity and shows the extent to which a firm’s most liquid assets
cover its current liabilities.
Question 3 The break-even point occurs where:
Question 4 The most meaningful basis for comparing operating
ratios is:
Question 5 ________ is/are the value of the owner’s
investment in the business.
Question 6 The ________ shows what assets the business owns
and what claims creditors and owners have against those assets.
Question 7 As a general rule, financial analysts suggest
that a small business maintain a(n) ________ ratio of at least 2:1.
Question 8 When a company is forced into liquidation, owners
are most likely to incur a loss when selling:
Question 9 The ________ is built on the basic accounting
equation: Assets = Liabilities + Owner’s Equity.
Question 10 A technique that allows the small business owner
to perform financial analysis by understanding the relationship between two
accounting elements is called:
Question 11 The ________ ratio measures the small company’s
ability to generate sales in relation to its assets.
Question 12 ________ ratios measure the financing supplied
by business owners and that supplied by the firm’s creditors.
Question 13 ________ are those things that a business owns
which have value.
Question 14 What is the difference between price per unit
and variable cost per unit?
Question 15 The ________ ratio is a measure of the small
company’s ability to pay current debts from current assets.
Question 16 ________ companies are most likely to suffer
cash shortages.
Question 17 When forecasting cash disbursements in the cash
budget:
Question 18 Once the owner determines an adequate minimum
cash balance, what is the next step in creating a cash budget?
Question 19 ________ is simply the money owed the firm by
customers because they’ve purchased goods or services on credit.
Question 20 ________ typically lead(s) sales; ________
typically lag(s) sales.
Question 21 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):
Question 22 The first step to building a workable credit
policy is:
Question 23 ________ is the money that moves through the
business in a continuous cycle.
Question 24 The budgeting strategy that evaluates the
necessity of every item on the budget each year by starting with a zero in each
budget category is called:
Question 25 A cash
budget is only as accurate as the ________ forecast from which it is derived.
Question 26 Efficient cash managers:
Question 27 An arrangement in which customers mail their
payments on account to a post office box which the company’s bank monitors,
from which it collects the payments, and then immediately deposits the payments
into the firm’s interest-bearing account is called a:
Question 28 Which of the following is an effective way to
trim overhead?
Question 29The “big three” of cash management
include:
Question 30 Generally speaking, most small business owners
tend to:
