Management of Cash MCQ

MCQ: Cash management is a broad term used for collecting and managing
cash. Speculative motive of holding cash refers to

A. Holding the cash to utilize it in internal projects

B. Holding the cash for any future loss the company is expecting
C. Holding the cash to avail any future investment opportunity
D. Holding the cash to utilize it for international project

MCQ: Quick ratio or acid test ratio is a more reliable ratio as most liquid
assets are used while calculating it. current liabilities are compared against
most liquid assets. Most liquid asset would mean

A. Current assets minus inventory and short term investments

B. Current assets minus inventory
C. Current assets minus account receivables
D. Current assets minus Inventory and receivables

MCQ: Companies hold cash time to time. Transactionary motive of holding

cash means

A. Keeping a cash reserve for purchasing goods and services to balance

out the cash inflows and outflow
B. Keeping the cash for all the transactions made during a periodic term
C. Keeping the cash for transactions mandatory for day to day activities
D. Keeping the transactions for foreign trading

MCQ: Vilfredo Pareto, an Italian economist created 20/80 rule. According to

him if time is managed efficiently we can save millions of dollars. According
to him

A. 80% time is wasted and 20% is spent on important things

B. 80% is used efficiently and 20% is wasted
C. 20% of the time is spent in meetings, moving around in the office,
gossiping, reading news papers et
 D. 80% of the time is spent in office and 20% is wasted at home and
travelling

1) In a month, payment for salary was Rs. 5,750 when the lag in payment of
salary is 1/8 month. If total salaries of current month are Rs 6,000, determine
the salaries of previous month.

a. Rs 4,800
b. Rs 4,250
c. Rs 4,000
d. Rs 4,750

2) Cash budget deals with historical data whereas Cash Flow Statement
deals with future data.

a. True
b. False

3) In cash flow method for preparing cash budget, payment of dividends and
prepaid payments are

a. Deducted from opening balance of cash

b. Added to opening balance of cash
c. Not included in cash budget
d. None of the above