QUIZ NO: 06
Business Finance
ACC 501-WINTER 2016
Max
Marks: 10
Marks obtained:
Due
date: Students must submit their quizzes before 12 O’ clock mid night on
4 March
2016
Note:
Highlight the correct answer, out of the four choices given for each
question.
1.
The average time between purchasing or acquiring inventory and receiving cash
proceeds from its sale is called ————–.
a)
Operating Cycle
b)
Cash Cycle
c)
Receivable period
d)
Inventory period
2.
Which of the following does not affect cash cycle of a company?
a)
Inventory period
b)
Accounts receivable period
c)
Accounts payable turnover
d)
None of the given option
3.
Mr.Munir purchased goods of Rs.100,000 on June01, 2006 from Zeeshan and
brothers on credit terms of 3/10, net 30. On June 09 Mr. Munir decided to make
payment to Zeeshan and brothers. How much he would pay to Zeeshan and brothers.
a)
100,000
b)
97,000
c)
103,000
d)
50,000
4.
A firm has cash cycle of 100 days. It has an inventory turnover of 5 and
receivable turnover of 2. What would be its accounts payable turn over?
a)
3.347 approximately
b)
5.347 approximately
c)
2.347 approximately
d)
6.253 approximately
5.
During the financial year 2005-2006 ended on June 30, the cash cycle of Climax
company was 150 days, and its payable turnover was 5. What was the operating
cycle of the company during 2005-2006?
a)
234 days
b)
223 days
c)
245 days
d)
230 days
6.
Which of the following is the cheapest source of financing available to a firm?
a)
Bank loan
b)
Commercial papers
c)
Trade credit
d)
None of the given options.
7.
Which of the following illustrates the use of a hedging (or matching) approach
to financing?
a)
Short-term assets financed with long-term liabilities.
b)
Permanent working capital financed with long-term liabilities.
c)
Short-term assets financed with equity.
d)
All assets financed with a 50 percent equity, 50 percent long-term debt mixture
8.
————— is an incentive offered by a seller to encourage a buyer to pay
within a stipulated time.
a)
Cash discount
b)
Quantity discount
c)
Float discount
d)
All of the given options
9.
If a firm has a net float less than zero, then which of the following
statements is true about the firm.
a)
The firm’s disbursement float is less than its collection float.
b)
The firm’s collection float is equal to zero.
c)
The firm’s collection float is less than its disbursement float.
d)
None of the given options.
10.
Financing a long-lived asset with short-term financing would be
a)
An example of “moderate risk — moderate (potential) profitability”
asset financing.
b)
An example of “low risk — low (potential) profitability” asset
financing.
c)
An example of “high risk — high (potential) profitability”
asset financing.
d)
An example of the “hedging approach” to financing
QUIZ NO: 06
Business Finance
ACC 501-WINTER 2016
Max
Marks: 10
Marks obtained:
Due
date: Students must submit their quizzes before 12 O’ clock mid night on
4 March
2016
Note:
Highlight the correct answer, out of the four choices given for each
question.
1.
The average time between purchasing or acquiring inventory and receiving cash
proceeds from its sale is called ————–.
a)
Operating Cycle
b)
Cash Cycle
c)
Receivable period
d)
Inventory period
2.
Which of the following does not affect cash cycle of a company?
a)
Inventory period
b)
Accounts receivable period
c)
Accounts payable turnover
d)
None of the given option
3.
Mr.Munir purchased goods of Rs.100,000 on June01, 2006 from Zeeshan and
brothers on credit terms of 3/10, net 30. On June 09 Mr. Munir decided to make
payment to Zeeshan and brothers. How much he would pay to Zeeshan and brothers.
a)
100,000
b)
97,000
c)
103,000
d)
50,000
4.
A firm has cash cycle of 100 days. It has an inventory turnover of 5 and
receivable turnover of 2. What would be its accounts payable turn over?
a)
3.347 approximately
b)
5.347 approximately
c)
2.347 approximately
d)
6.253 approximately
5.
During the financial year 2005-2006 ended on June 30, the cash cycle of Climax
company was 150 days, and its payable turnover was 5. What was the operating
cycle of the company during 2005-2006?
a)
234 days
b)
223 days
c)
245 days
d)
230 days
6.
Which of the following is the cheapest source of financing available to a firm?
a)
Bank loan
b)
Commercial papers
c)
Trade credit
d)
None of the given options.
7.
Which of the following illustrates the use of a hedging (or matching) approach
to financing?
a)
Short-term assets financed with long-term liabilities.
b)
Permanent working capital financed with long-term liabilities.
c)
Short-term assets financed with equity.
d)
All assets financed with a 50 percent equity, 50 percent long-term debt mixture
8.
————— is an incentive offered by a seller to encourage a buyer to pay
within a stipulated time.
a)
Cash discount
b)
Quantity discount
c)
Float discount
d)
All of the given options
9.
If a firm has a net float less than zero, then which of the following
statements is true about the firm.
a)
The firm’s disbursement float is less than its collection float.
b)
The firm’s collection float is equal to zero.
c)
The firm’s collection float is less than its disbursement float.
d)
None of the given options.
10.
Financing a long-lived asset with short-term financing would be
a)
An example of “moderate risk — moderate (potential) profitability”
asset financing.
b)
An example of “low risk — low (potential) profitability” asset
financing.
c)
An example of “high risk — high (potential) profitability”
asset financing.
d)
An example of the “hedging approach” to financing
QUIZ NO: 06
Business Finance
ACC 501-WINTER 2016
Max
Marks: 10
Marks obtained:
Due
date: Students must submit their quizzes before 12 O’ clock mid night on
4 March
2016
Note:
Highlight the correct answer, out of the four choices given for each
question.
1.
The average time between purchasing or acquiring inventory and receiving cash
proceeds from its sale is called ————–.
a)
Operating Cycle
b)
Cash Cycle
c)
Receivable period
d)
Inventory period
2.
Which of the following does not affect cash cycle of a company?
a)
Inventory period
b)
Accounts receivable period
c)
Accounts payable turnover
d)
None of the given option
3.
Mr.Munir purchased goods of Rs.100,000 on June01, 2006 from Zeeshan and
brothers on credit terms of 3/10, net 30. On June 09 Mr. Munir decided to make
payment to Zeeshan and brothers. How much he would pay to Zeeshan and brothers.
a)
100,000
b)
97,000
c)
103,000
d)
50,000
4.
A firm has cash cycle of 100 days. It has an inventory turnover of 5 and
receivable turnover of 2. What would be its accounts payable turn over?
a)
3.347 approximately
b)
5.347 approximately
c)
2.347 approximately
d)
6.253 approximately
5.
During the financial year 2005-2006 ended on June 30, the cash cycle of Climax
company was 150 days, and its payable turnover was 5. What was the operating
cycle of the company during 2005-2006?
a)
234 days
b)
223 days
c)
245 days
d)
230 days
6.
Which of the following is the cheapest source of financing available to a firm?
a)
Bank loan
b)
Commercial papers
c)
Trade credit
d)
None of the given options.
7.
Which of the following illustrates the use of a hedging (or matching) approach
to financing?
a)
Short-term assets financed with long-term liabilities.
b)
Permanent working capital financed with long-term liabilities.
c)
Short-term assets financed with equity.
d)
All assets financed with a 50 percent equity, 50 percent long-term debt mixture
8.
————— is an incentive offered by a seller to encourage a buyer to pay
within a stipulated time.
a)
Cash discount
b)
Quantity discount
c)
Float discount
d)
All of the given options
9.
If a firm has a net float less than zero, then which of the following
statements is true about the firm.
a)
The firm’s disbursement float is less than its collection float.
b)
The firm’s collection float is equal to zero.
c)
The firm’s collection float is less than its disbursement float.
d)
None of the given options.
10.
Financing a long-lived asset with short-term financing would be
a)
An example of “moderate risk — moderate (potential) profitability”
asset financing.
b)
An example of “low risk — low (potential) profitability” asset
financing.
c)
An example of “high risk — high (potential) profitability”
asset financing.
d)
An example of the “hedging approach” to financing
QUIZ NO: 06
Business Finance
ACC 501-WINTER 2016
Max
Marks: 10
Marks obtained:
Due
date: Students must submit their quizzes before 12 O’ clock mid night on
4 March
2016
Note:
Highlight the correct answer, out of the four choices given for each
question.
1.
The average time between purchasing or acquiring inventory and receiving cash
proceeds from its sale is called ————–.
a)
Operating Cycle
b)
Cash Cycle
c)
Receivable period
d)
Inventory period
2.
Which of the following does not affect cash cycle of a company?
a)
Inventory period
b)
Accounts receivable period
c)
Accounts payable turnover
d)
None of the given option
3.
Mr.Munir purchased goods of Rs.100,000 on June01, 2006 from Zeeshan and
brothers on credit terms of 3/10, net 30. On June 09 Mr. Munir decided to make
payment to Zeeshan and brothers. How much he would pay to Zeeshan and brothers.
a)
100,000
b)
97,000
c)
103,000
d)
50,000
4.
A firm has cash cycle of 100 days. It has an inventory turnover of 5 and
receivable turnover of 2. What would be its accounts payable turn over?
a)
3.347 approximately
b)
5.347 approximately
c)
2.347 approximately
d)
6.253 approximately
5.
During the financial year 2005-2006 ended on June 30, the cash cycle of Climax
company was 150 days, and its payable turnover was 5. What was the operating
cycle of the company during 2005-2006?
a)
234 days
b)
223 days
c)
245 days
d)
230 days
6.
Which of the following is the cheapest source of financing available to a firm?
a)
Bank loan
b)
Commercial papers
c)
Trade credit
d)
None of the given options.
7.
Which of the following illustrates the use of a hedging (or matching) approach
to financing?
a)
Short-term assets financed with long-term liabilities.
b)
Permanent working capital financed with long-term liabilities.
c)
Short-term assets financed with equity.
d)
All assets financed with a 50 percent equity, 50 percent long-term debt mixture
8.
————— is an incentive offered by a seller to encourage a buyer to pay
within a stipulated time.
a)
Cash discount
b)
Quantity discount
c)
Float discount
d)
All of the given options
9.
If a firm has a net float less than zero, then which of the following
statements is true about the firm.
a)
The firm’s disbursement float is less than its collection float.
b)
The firm’s collection float is equal to zero.
c)
The firm’s collection float is less than its disbursement float.
d)
None of the given options.
10.
Financing a long-lived asset with short-term financing would be
a)
An example of “moderate risk — moderate (potential) profitability”
asset financing.
b)
An example of “low risk — low (potential) profitability” asset
financing.
c)
An example of “high risk — high (potential) profitability”
asset financing.
d)
An example of the “hedging approach” to financing
