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Exam 17: Financial Management Appendix C Managing Risk

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Question 31

Multiple Choice

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To reduce the time and expense of collecting accounts receivables,some firms:

A) accept bank-issued credit cards.
B) adopt a just-in-time inventory policy.
C) extend credit to new customers.
D) offer extended payment plans to existing customers.

E) C) and D)
F) A) and D)

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Question 32

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One activity of the accounting function is to collect payments from overdue customer accounts.

A) True
B) False

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Question 33

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Financial management is more important for a large firm than it is for a small firm.

Tiffany's work in the finance department of her firm consists of checking accounting records and financial statements to verify that proper procedures are followed.Tiffany's activities are those of a(n) :

A share of stock represents a company-issued IOU including a promise to repay on a certain date.

A line of credit from a bank guarantees a firm that a specified amount of financing will be available whenever it is needed.

Which of the following companies faces the problem of undercapitalization?

Budgeting,managing receivables,payables,and inventory,and managing taxes are all part of a(n) ______job.

Suppliers offer trade credit to their business customers by providing merchandise and requiring payment at a later date.

Managing a firm's resources so that it can meet its goals and objectives is the goal of financial accounting.

Admiral Electric is a widely known,successful manufacturer of industrial motors and related equipment.When Admiral Electric anticipates a need for short-term funds,it offers unsecured promissory notes to investors for 180 days.To obtain short-term financing,Admiral Electric utilizes:

A financial manager is responsible for obtaining the necessary money to enable a firm to achieve its goals and objectives.

As the chief financial officer (CFO)for a medium-sized service company,Shelley is concerned about the possibility of temporary cash shortages.Given the irregular cash flows from seasonal sales,she wants to ensure that her company's bank will provide adequate funds to cover any potential cash flow problem.The best strategy to ease Shelley's concern would be to arrange a revolving credit agreement with the bank.

Anna operates a florist shop specializing in weddings.While she knows that her competitors allow customers to buy on credit,she is concerned about the risk and expense of unpaid customer accounts.One strategy to reduce risk and collect sales revenue more quickly would be to accept bank-issued credit cards.

Karen,a financial manager with Bigbux Incorporated,regularly compares actual revenues and expenses against their projected values.After identifying areas with significant deviations from planned values,she investigates to find the cause of these variances.Karen's activities represent the steps involved in the preparation of Bigbux's capital budget.

There is actually a stronger relationship between finance and marketing than there is between finance and accounting.

Identify and describe the major steps involved in financial planning.

Victoria Nursery offers customers credit terms of 3/15 net 30.This gives customers a:

Carlos wants to know the income potential of several different strategic plans for his computer consulting business.Which of the following would be most helpful?

The most widely used source of short-term funding is: