Republic of the Philippines

Department of Education
DIVISION OF CITY SCHOOLS, CITY OF NAGA
DON EMILIO CANONIGO SENIOR HIGH SCHOOL
PANGDAN, CITY OF NAGA, CEBU
School ID: 303002

WEEK 4 TEST QUESTIONAIRE FOR BUSINESS FINANCE

Test Question ( Multiple-Choice) Level No. of
points
DIRECTION: Read each item carefully and write the letter of your chosen answer. Easy (40% Averag Difficul Answer
or 4 pts.) e t (10
pts.)
30% or (30% or
3 pts.) 3 pts.)

1. It is to ensure that a company operates efficiently by monitoring and using its current 1 A
assets and liabilities to the best effect.
A. working capital management C. inventory management
B. cash management D. receivable management

2. These refer to cash, accounts receivable, inventories, and prepaid expenses. 1 A

A. current assets B. noncurrent assets C. current liabilities D. owner’s
equity

3. It is difference between current assets and current liabilities. 1 1 B

A. permanent working capital C. temporary working capital
B. net working capital D. contractual working capital

4. In this working capital financing policy, the permanent working capital requirements 1 A
should be financed by long-term sources while temporary working capital requirements
should be financed by short-term sources of financing.
A. maturity-matching B. conservative C. aggressive D. modern
 Republic of the Philippines
Department of Education
DIVISION OF CITY SCHOOLS, CITY OF NAGA
DON EMILIO CANONIGO SENIOR HIGH SCHOOL
PANGDAN, CITY OF NAGA, CEBU
School ID: 303002

5. It is the time to collect cash from the sale of the inventory. 1 C

A. days of inventory C. days of receivable
B. days of payable D. none of the above

6. In this working capital financing policy, some of the permanent working capital 1 C
requirements are financed by short-term sources of financing.
A. maturity-matching C. aggressive
B. conservative D. modern

7. In this kind of working capital policy, some of the temporary working capital 1 B
requirements are financed by long-term sources of financing.
A. maturity-matching C. aggressive
B. conservative D. modern

8. Why cash management is important? 1 A

A. It involves the maintenance of a cash and marketable securities investment level
which enables the company to meet its cash requirements and at the same time,
optimize the income of idle funds.
B. It is the minimum level of current assets required by a firm to continue.
C. It is the operations of the business and to cover up all current liabilities.
D. It is the stocks of the product the business is selling and the parts or raw materials that
made up the product.

9. Philippine Products Company is concerned about managing cash efficiently. On the 1 B

average, inventories have an age of 90 days and accounts receivable are collected in 60
days. Accounts payable are paid approximately 30 days after they arise. The firm has
annual sales of about PHP30 million. Assume there is no difference in the investment per
 Republic of the Philippines
Department of Education
DIVISION OF CITY SCHOOLS, CITY OF NAGA
DON EMILIO CANONIGO SENIOR HIGH SCHOOL
PANGDAN, CITY OF NAGA, CEBU
School ID: 303002

peso of sales in inventory, receivables, and payables and that there is a 360-day year.
How much is the firm’s cash conversion cycle?
A. 150 days B. 120 days C. 180 days D. 125 days

10. Base on the situation on number 9. How much is the firm’s operating cycle? 1 A
A. 150 days B. 120 days C. 180 days D. 125 days

Prepared by:
MARIZ B. AÑIRO
Teacher II Checked by:

PATRICIO M. MANUNDAN
School Head