BUSN 379 Week 7 Homework

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BUSN 379 Week 7 Homework

 1.Question :(TCO 2) Select any actions that do not affect the cash account. Select all that apply:
Student Answer: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
 2.Question :(TCO 2)  Which one of the following actions will decrease the operating cycle?
Student Answer: 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
 3.Question :(TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter?
Student Answer: $550
 None of the above
 4.Question :(TCO 2) Which of the following does not reduce collection float?
Student Answer: deposit collections at least daily.
 make sure all checks it receives are properly dated and signed.
 utilize the benefits of the Check Clearing Act for the 21stCentury.
 consolidate all lockboxes into one lockbox located near the home office.

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 5.Question :(TCO 2) Which of the following statements is false? Select all that apply:
Student Answer: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.
 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 3/25, net 40. How much should you remit if you take the discount?
Student Answer: $52,200
 None of the above
 7.Question :(TCO 2) Auto Parts sells 1,600 electric parts per week and then reorders another 1,600 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $650, what is the total carrying cost and the restocking cost, respectively?
Student Answer: $6,400 and $33,800
 $3,200 and $33,800
 $6,400 and $7,800
 $6,400 and $33,000
 None of the above
 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?
Student Answer: 310 units
 300 units
 150 units
 155 units
 None of the above
 9.Question :(TCO 2) The ___________ is the time that elapses between the sale of an item and the receipt of payment for that sale.
Student Answer: accounts receivable period
 accounts payable period
 cash cycle
 customer operating cycle
 None of the above

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