Accounting Information Systems
11th Edition
ISBN: 9781337676557
Author: Ulric J. Gelinas; Richard B. Dull; Patrick Wheeler
Publisher: Cengage Learning US
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Chapter 9, Problem 3DQ
Describe the similarities and differences between limit checks and reasonable checks. Give examples where each may be appropriate.
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The opportunity cost of holding cash is inversely related to the level of market interest rates.
Question 9 options:
True
False
Your firm deals strictly with four customers. The average amount that each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the amount of the average daily receipts?
Assume that every month has 30 days.
Customer
Item Amount
Delay
A
$8,500
5 days
B
$12,000
2 days
C
$16,000
3 days
D
$3,600
2 days
Question 8 options:
$8,448
$1,337
$3,342
$1,408
$10,025
Which of the following is true regarding cash management?
Question 7 options:
The basic objective in cash management is to keep the investment in cash as low as possible while still operating efficiently and effectively.
Effective cash management results in minimization of the total interest earnings involved with holding cash.
A cost of holding cash is the liquidity it gives the firm.
A firm should decrease its cash holdings as long as the NPV of doing so is negative.
A cost of holding cash is the interest income earned on the outstanding cash balance.
Chapter 9 Solutions
Accounting Information Systems
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - How could the control matrix be used to recommend...Ch. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Name and explain four different types of batch...Ch. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 1DQCh. 9 - Explain why input controls are so important....Ch. 9 - Describe the similarities and differences between...Ch. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 9DQCh. 9 - Prob. 10DQCh. 9 - Prob. 11DQCh. 9 - The following is a list of six control plans from...Ch. 9 - Prob. 2SPCh. 9 - Figure 9.10 lists 10 control plans from this...Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Low default risk is a characteristic of money market securities. Question 6 options: True Falsearrow_forwardJeep Corp. held large sums of cash during the mid-1990s primarily because it would need a large amount of cash in the event of a recession. This is a[n] _____ for holding cash. Question 5 options: Adjustment motive. Compensating balances motive. Speculative motive. Transactions motive. Precautionary motive.arrow_forwardWith respect to the workings of a lockbox system, the cheque clearing process begins before the company even knows the payments have been received. Question 4 options: True Falsearrow_forward
- You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 1.5 days. On an average day, your firm receives 250 checks with an average value of $400 each. The daily interest rate on Treasury bills is .02%. What is the anticipated amount of the daily savings if this system is implemented? Question 3 options: $30 $25 $15 $20 $10arrow_forwardDisbursement float is virtually eliminated when payments are made electronically. Question 2 options: True Falsearrow_forwardAccording to your cheque book, you have a $3,000 balance in your account. You write cheques totaling $4,500 and make a deposit of $3,500. Determine your net float. Question 1 options: $8,000 -$1,000 $0 $1,000 $4,000arrow_forward
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- I need help ! What does “liquidity” refer to in finance? a) The profitability of a companyb) The ease of converting assets into cashc) The stability of incomed) The level of debtarrow_forwardWhat does “liquidity” refer to in finance? a) The profitability of a companyb) The ease of converting assets into cashc) The stability of incomed) The level of debtarrow_forwardWhich of the following is considered a long-term source of finance for a business? A) Trade credit B) Short-term bank loan C) Issue of shares D) Overdraftarrow_forward
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