#1
Which of the following is a characteristic of a cash budget?
It estimates future cash inflows and outflows.
It only considers cash inflows.
It does not involve forecasting.
It focuses solely on long-term financial planning.
#2
What is the primary purpose of preparing a budget?
To control costs
To analyze historical data
To evaluate employee performance
To forecast future financial performance
#3
What is the primary objective of cash flow analysis in managerial accounting?
To assess the liquidity position of the business
To evaluate employee performance
To determine the profitability of the business
To calculate the return on investment (ROI)
#4
Which of the following budgets focuses on planned expenditures for acquiring long-term assets?
Operating budget
Sales budget
Capital expenditure budget
Cash budget
#5
What is the purpose of a cash budget in managerial accounting?
To estimate future sales revenue
To forecast future cash inflows and outflows
To calculate net income
To analyze historical data
#6
Which of the following is NOT typically included in a cash flow statement?
Cash from operating activities
Cash from investing activities
Cash from financing activities
Accounts receivable
#7
What is the formula to calculate cash flow from operations?
(Net income + Non-cash expenses) - Changes in working capital
Net income + Depreciation
Net income - Non-cash expenses
(Net income - Non-cash expenses) + Changes in working capital
#8
What does a flexible budget do that a static budget does not?
It remains unchanged regardless of activity levels.
It adjusts budgeted amounts based on actual activity levels.
It only considers variable costs.
It focuses solely on long-term financial planning.
#9
What is the formula for calculating the payback period of an investment?
Initial investment / Net cash flow
Initial investment - Net cash flow
Net cash flow / Initial investment
Net cash flow - Initial investment
#10
What does the cash ratio measure?
The ability of a company to pay its current liabilities with its most liquid assets
The proportion of cash sales to total sales
The amount of cash available for investment
The ratio of cash to total assets
#11
In a budgeted income statement, which of the following is subtracted from sales revenue to calculate gross profit?
Cost of goods sold
Operating expenses
Interest expense
Depreciation expense
#12
What does the cash conversion cycle measure?
The time it takes to sell inventory and collect cash
The time it takes to pay suppliers and convert inventory into cash
The time it takes to convert accounts receivable into cash
The time it takes to pay suppliers and collect accounts receivable
#13
What is the formula to calculate free cash flow?
Operating cash flow - Capital expenditures
Net income - Dividends
Cash from investing activities + Cash from financing activities
Net income + Depreciation
#14
Which of the following is included in the cash flow from operating activities section of a cash flow statement?
Cash received from issuing bonds.
Cash paid for dividends.
Cash received from selling equipment.
Cash collected from customers.
#15
What is the formula to calculate operating cash flow?
Net income + Depreciation
Net income - Non-cash expenses
(Net income + Non-cash expenses) - Changes in working capital
Net income + Changes in working capital