On a daily basis, the cash manager is responsible for all of the following EXCEPT:

• A.determining the cash position.
• B.reviewing bank service fees.
• C.initiating funds transfers.
• D.executing investment and/or borrowing decisions.

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The board of directors of ABC Corporation has asked the CFO to consider adopting the direct method in preparing cash flow statements instead of the indirect method currently in use. Why would the board of directors promote this shift?

• A.A major stockholder is demanding more information about the actual uses of cash.
• B.The indirect method is less reliable and independent auditors are more likely to question its outcomes.
• C.The direct method, in most cases, results in higher increases in cash from operating activities.
• D.The IASB requires firms to adopt the direct method.

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A major toy retailer operates 65 retail stores throughout the Midwest. Which of the following credit terms is MOST LIKELY to be offered to this company by its suppliers?

• A.Seasonal dating
• B.Letter of credit
• C.Factoring
• D.Floor planning

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Which of the following is a benefit to a company that publicly trades its stock?

• A.It passes public disclosure requirements to shareholders.
• B.It allows management holding a majority ownership to have control.
• C.Its stock price reflects the value of the company in the market.
• D.It reduces management and shareholder conflicts.

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XYZ Company is a fairly new and high growth company funded by venture capital. Which of the following performance measures is it MOST LIKELY to use?

• A.Net present value
• B.Residual income
• C.Economic value added
• D.Free cash flow

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