Sample computer science questions

Question 1

One type of investment that would not be suitable for marketable securities would be:

[removed] bankers’ acceptances
[removed] short-term notes of U.S. government agencies
[removed] negotiable CD’s
[removed] mortgages


Question 2

  1.  The objective of managing current assets and liabilities is to


[removed] achieve as low a level of current assets as possible.
[removed] achieve as low a level of current liabilities as possible.
[removed] achieve a balance between profitability and risk that contributes to the firm’s value.
[removed] achieve as high a level of current liabilities as possible.


Question 3

  1.  The goal of a company’s cash management policy is to


[removed] increase the cash conversion cycle.
[removed] increase the payment period.
[removed] minimize the cash requirement.
[removed] maximize cash outflows.


Question 4

  1.  Working capital does not include:


[removed] cash
[removed] accounts receivable
[removed] marketable securities
[removed] property, plant, and equipment


Question 5

  1.  Calculation of a firm’s average collection period is the same as calculating the:


[removed] accounts receivable cycle
[removed] inventory cycle
[removed] accounts payable cycle
[removed] short-term operating cycle


Question 6

  1.  A negative cash conversion cycle indicates that the


[removed] operating cycle exceeds the average payment period.
[removed] average payment period exceeds the operating cycle.
[removed] firm is shortening its average payment period and lengthening its average collection period.
[removed] lengthening its average collection period and lengthening its inventory period.


Question 7

  1.  The time between when a payee sends payment and the funds are credited to the payer’s bank account is called the:


[removed] collection float
[removed] disbursement float
[removed] total float
[removed] transmittal float


Question 8

  1.  Sources of short-term financing such as accounts payable, notes payable, and accruals should be used to finance:


[removed] all current assets
[removed] all fixed assets
[removed] a portion of the current assets needed to support nonseasonal sales levels plus all of the seasonal build-up in current assets
[removed] a portion of the fixed assets plus all of the seasonal build-up in current assets


Question 9

  1.  Holding all other factors constant, if a firm increases its current liabilities relative to total assets,


[removed] it increases return and reduces risk.
[removed] it increases return and increases risk.
[removed] it reduces return and reduces risk.
[removed] it reduces return and increases risk.


Question 10

  1.  If a firm purchases materials on credit and thus has accounts payable, its cash conversion cycle will be:


[removed] longer than its operating cycle
[removed] the same length as its operating cycle
[removed] shorter than its operating cycle
[removed] the same length as its sales turnover cycle


Question 11

  1.  Firms who wish to obtain short-term secured loans generally have two major current assets available as collateral in the form of:


[removed] cash and marketable securities
[removed] receivables and inventory
[removed] receivables and factoring
[removed] inventory and floor planning


Question 12

  1.  Net working capital is defined as:


[removed] current assets plus current liabilities
[removed] current assets less fixed assets
[removed] current assets less current liabilities
[removed] current liabilities plus long-term liabilities


Question 13

  1.  Commercial finance companies obtain loanable funds:


[removed] to a lesser extent than commercial banks through equity capital
[removed] through both long- and short-term borrowing
[removed] from the Small Business Administration
[removed] primarily from the sale of preferred stock


Question 14

  1.  The prime rate offered by commercial banks is their _____________ rate to their ______________ quality business customers.


[removed] highest, highest
[removed] lowest, lowest
[removed] lowest, highest
[removed] highest, lowest


Question 15

  1.  The most important reason for directly issuing or using commercial paper dealers is:


[removed] the cost of borrowing is generally less than regular bank rates
[removed] it’s a profitable alternative to the purchase of Treasury bills
[removed] the avoidance of compensating balances
[removed] the convenience and profitability


Question 16

  1.  The bank line of credit is:


[removed] the type of business activity on which a particular bank concentrates its lending
[removed] the maximum amount of credit extended to a business customer during a period of one year
[removed] the average of loans made to a business customer during a year
[removed] the loan limit that a bank has established for a business customer


Question 17

  1.  Permanent current assets are:


[removed] accounts receivable that have become bad debts
[removed] inventories that have become obsolete
[removed] the level of current assets equal to fixed assets
[removed] the level of current assets needed to support sales


Question 18

  1.  If a firm actually sells its accounts receivable, the process is known as:


[removed] wholesale financing
[removed] floor planning
[removed] field crediting
[removed] factoring


Question 19

  1.  The purchaser may deduct 2% from the purchase price if payment is made within 10 days; but if not paid within 10 days, the net amount of the purchase is due within 30 days. The sale is made on what terms?


[removed] 10/30, net/2
[removed] 2/10, net/30
[removed] 2/30, net/10
[removed] 10/2, net/30


Question 20

  1.  A __________________ is a claim against a customer’s inventory when the individual items are indistinguishable.


[removed] floor plan receipt
[removed] trust receipt
[removed] warehouse receipt
[removed] blanket inventory lien