FIN420 CHAPTER 4

The "month following" means the month after a transaction has occurred

• True

• False

A business has estimated credit sales of $100,000 for April. What is the estimated cash they would receive in June if the expected collection rate is:

70% in the month following

30% in the second month

• $70,000

• $30,000

• $100,000

The "month following" means the month after a transaction has occurred

• True

• False

A business has estimated credit sales of $100,000 for April. What is the estimated cash they would receive in June if the expected collection rate is:

70% in the month following

30% in the second month

• $70,000

• $30,000

• $100,000

A business has estimated credit sales of $200,000 for January. What is the estimated cash they would receive in February if the expected collection rate is:

70% in the month following

20% in the second month

10% in the third month

• $40,000

• $70,000

• $140,000

• $20,000

A business has estimated credit sales of $200,000 for January. What is the estimated cash they would receive in May if the expected collection rate is:

70% in the month following

20% in the second month

10% in the third month

• $40,000

• $70,000

• $140,000

• $0

What is the purpose of a cash budget?

• To get people into trouble if they overspend

• To make people use spreadsheets

• To see what happened to cash last year

• To plan for the future

The two main headings of a Cash budget are

• Cash Receipts and Cash Payments

• Cash Receipts and Cash Credit

• Cash Debit and Cash Credit

• Accounts Payable and Accounts Receivable

May's Closing Balance is the same as

• May's Opening Balance

• June's Opening Balance

• June's Closing Balance

• It is not the same as anything

Which of these do not appear in a Cash Budget?

• Payments

• Receipts

• Closing Balance

• Profit