16.Which type of current asset financing policy is riskiest? a. compromise finan
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Question
16.Which type of current asset financing policy is riskiest?
a. compromise financing policy,
b. flexible financing policy,
c. restrictivefinancingpolicy,
d. maturity matching financing policy.
17.If the economy is in a decline, which type of current asset financing should be used?
a. compromise financing policy,
b. flexible financing policy,
c. restrictivefinancingpolicy,
d. maturity matching financing policy.
18.Which type of current asset financing policy provides the lowest expected return?
a. compromise financing policy,
b. flexible financing policy,
c. restrictivefinancingpolicy,
d. maturity matching financing policy.
19.What is the best way to control payables disbursements
a. lockbox services,
b. departmentalization,
c. concentrationbanking.
d. payables centralization,
20.Which is not one of the three most popular ways to speed collections?
a. Negative float,
b. Lockbox services,
c. Concentrationbanking,
d. Electronic claims processing.
21.Using financial statements to assess the financial condition of the business is;
a. Financial statement analysis,
b. Operating indicator analysis,
c. Bothoftheabove.
22.Using comparative analysis is best for determining;
a. How your firm performed compared to your competitors,
b. How your firm performed compared to last year,
c. How your competitors performed last year.
23.Using trend analysis is easiest with;
A. How your firm performed compared to your competitors,
B. How your firm performed compared to last year,
C. How your competitors performed last year.
24.Inflation can distort which analysis?
a. Comparative analysis,
b. Trend analysis,
c. Bothoftheabove.
25.A short-term creditor would be most concerned with which category of ratios?
a. Liquidity ratios,
b. Profitability ratios,
c. Debtmanagementratios,
d. Asset management ratios,
26.An investor would be most concerned with which category of ratios?
a. Liquidity ratios,
b. Profitability ratios,
c. Debtmanagementratios,
d. Asset management ratios.
27.A lease that provides for both the financing and maintenance of an asset
A. Is a Financial Lease,
B. Is an Operating Lease,
C. Is neither an Operating Lease or a Financial Lease
D. Can be both an Operating Lease or a Financial Lease.
28. The cancelation of a lease would be done most likely by
A.The lessee in a Financial Lease,
B. The lessee in a Financial Lease,
C. The lessor in an Operating Lease,
D. The lessee in an Operating Lease.
29. A lease that is a contractual obligation for the lessee
A. Is a Financial Lease,
B. Is an Operating Lease,
C. Is neither an Operating Lease or a Financial Lease,
D. Can be both an Operating Lease or a Financial Lease.
30. A lease that is designed to cover the full cost of the leased asset
A. Is a Financial Lease,
B. Is an Operating Lease,
C. Is neither an Operating Lease or a Financial Lease.
D. Can be both an Operating Lease or a Financial Lease,
Explanation / Answer
Answer 16) c. restrictive financing policy, is the riskiest current asset financing policy as these are forcefully implemented without any tolerance or deviation.
Answer 17) If the economy is in a decline, which type of current asset financing should be used a. compromise financing policy
Answer 18) b. flexible financing policy, current asset financing policy provides the lowest expected return as these are the one which are relaxed policy in which company takes less risk, therefore leading to less expected return or lowest expected return.
Answer 19) c. concentration banking is the best way to control payables disbursements. Under this a centralized concentration account is managed instead of managing multiple account and all the disbursement are taken care by this account.
Answer 20) a. Negative float, not one of the three most popular ways to speed collections as the other three helps in speedy collections.
Answer 21) c. Both of the above is used to assess the financial condition of the business is as financial statement analyses uses financial statements to assess the financial conditions whereas operating indicator analyses uses operating data to access the financial condition.
Answer 22) Using comparative analysis is best for determining how your firm performed compared to last year as this is used to compare the financial statement of the firm
Answer 23) Using trend analysis is easiest with how your firm performed compared to last year Example of trend analysis is to see the revenue trends for the firm
Answer 24) Inflation can distort Comparative analysis as this has effect on the balance sheet of the firm.
Answer 25) a. Liquidity ratios, A short-term creditor would be most concerned with Liquidity ratios, as they want to know how much time the firm takes to convert the cash.
Answer 26) An investor would be most concerned with Profitability ratios as to know how profitable the firm or is performing well to invest.
Answer 27) A lease that provides for both the financing and maintenance of an asset A. Is a Financial Lease. In financial lease the lease bears maintenance insurance and taxes.
Answer 28) The cancelation of a lease would be done most likely by D. The lessee in an Operating Lease.
Answer 29) A lease that is a contractual obligation for the lessee Is an Operating Lease
Answer 30) A lease that is designed to cover the full cost of the leased asset Is an Operating Lease
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