Cash Management and Control Quiz
Test your knowledge on cash management goals, techniques, and internal controls with these insightful quiz questions.
#1
What is the primary goal of cash management?
Maximizing profits
Minimizing expenses
Minimizing the cost of holding cash
Maximizing revenue
#2
Which cash management technique involves negotiating favorable terms with suppliers for payment delays?
Cash concentration
Lockbox system
Factoring
Stretching accounts payable
#3
What is the primary purpose of a cash flow forecast in cash management?
To record historical cash transactions
To predict future cash inflows and outflows
To reconcile bank statements
To calculate interest on loans
#4
Which cash management technique involves speeding up the collection of customer payments?
Cash concentration
Lockbox system
Factoring
Stretching accounts receivable
#5
Which of the following is a cash management technique to accelerate cash inflows?
Delaying payments to suppliers
Offering cash discounts to customers for early payments
Holding excess cash in the bank
Investing in long-term securities
#6
What is the purpose of a bank reconciliation statement in cash control?
To record daily cash transactions
To reconcile the cash account with the bank statement
To calculate interest on loans
To track customer payments
#7
Which of the following is a key component of cash concentration in cash management?
Delaying payments
Consolidating funds from multiple accounts into one
Holding excess cash
Investing in long-term securities
#8
What is the primary drawback of holding a large cash balance in a company's account?
Increased risk of theft
Reduced liquidity
Increased interest earnings
Increased transaction costs
#9
Which of the following is an example of a preventive internal control measure for cash management?
Regular bank reconciliations
Random cash audits
Segregation of duties
Issuing pre-numbered receipts
#10
What is the float in cash management?
The time it takes for a check to clear
The difference between book cash and bank cash
The amount of cash needed for day-to-day operations
The maximum cash balance a company can hold
#11
What is the purpose of a lockbox system in cash management?
To secure physical cash in a safe
To speed up the collection of customer payments
To reconcile bank statements
To invest excess cash in the market
#12
In the Baumol Model of cash management, what does the 'T' represent?
Transaction cost
Total cash balance
Time between cash disbursements
Target cash balance
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