Management of Cash Quiz Questions and Answers PDF Download - 29

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

1. Holding the cash to utilize it in internal projects
2. Holding the cash for any future loss the company is expecting
3. Holding the cash to avail any future investment opportunity
4. Holding the cash to utilize it for international project

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

1. Current assets minus inventory and short term investments
2. Current assets minus inventory
3. Current assets minus account receivables
4. Current assets minus Inventory and receivables

Companies hold cash time to time. Transactionary motive of holding cash means

1. Keeping a cash reserve for purchasing goods and services to balance out the cash inflows and outflow
2. Keeping the cash for all the transactions made during a periodic term
3. Keeping the cash for transactions mandatory for day to day activities
4. Keeping the transactions for foreign trading

Vilfredo Pareto, an Italian economist created the 20/80 rule. According to him if time is managed efficiently we can save millions of dollars. According to him

1. 80% time is wasted and 20% is spent on important things
2. 80% is used efficiently and 20% is wasted
3. 20% of the time is spent in meetings, moving around in the office, gossiping, reading news papers et
4. 80% of the time is spent in office and 20% is wasted at home and travelling

Every organization have its own strengths, weaknesses, opportunities and threats. Two of these belong to the inside of the organization whereas the other two belongs to outside. Identify where the strength and opportunity belongs?

1. Both belongs to outside
2. First belongs to inside and the second belongs to outside
3. First belongs to outside and the second belongs to inside
4. Both belongs to inside.