Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
FMA
Financial and Managerial Accounting Unit 3
| Term | Definition |
|---|---|
| What is the primary goal of cash budgeting for a company? | To forecast cash inflows and outflows, helping companies detect cash shortages early and take corrective actions. |
| Why is cash management important for businesses? | Cash is necessary for paying employees, bills, rent, and other day-to-day operations. |
| What are the two main aspects of managing cash flow? | Accounts Receivable (managing outstanding payments from customers) and Accounts Payable (managing payments to suppliers). |
| Why is forecasting cash flows over several months important? | It helps avoid potential cash flow issues by predicting cash shortages or surpluses in advance. |
| What are the main sources of cash inflows for a business? | Cash Sales and Collection of Receivables (cash collected from credit sales). |
| What is key to successful cash inflow budgeting? | Understanding when and how much cash will be collected from sales and past credit sales. |
| How do you forecast cash outflows for inventory purchases? | By using sales data to calculate the cost of goods sold (COGS) and understanding when payments for inventory purchases will be made. |
| What does the budget for cash outflows help a business plan for? | Payments for expenses like inventory, payroll, and rent. |
| What happens if cash inflows do not cover cash outflows in a given month? | A cash shortfall occurs, and the company may need to secure short-term financing. |
| What is the importance of forecasting cash collections? | It helps ensure timely cash availability and proactive planning to avoid cash flow gaps. |
| How can a company prepare for future shortfalls in cash? | By securing financing, negotiating payment extensions with suppliers, and accelerating collections from customers. |
| What is the key takeaway from cash budgeting? | Forecasting both cash inflows and outflows gives businesses control over their cash position and helps prevent financial surprises. |
| What factors below contribute to a company’s pattern of cash collections? | Industry, firm size, and the firm’s credit policies |
| In what way does a cash budget allow a manager to take action now? | It allows the manager to identify cash shortages in advance. |
| According to a company’s cash budget, when can management plan to repay the company’s loans? | When excess cash is available |
| What are the principal sources of a company’s cash inflows? | Cash sales and the collection of cash from prior credit sales |
| What is the main purpose of using Excel charts for cash budgeting? | To visualize cash inflows and outflows, aiding decision-making for managing cash flows and negotiating short-term loan terms. |
| What does Excel's Chart Menu allow you to do? | The Chart Menu provides options for design, data adjustments, and formatting when working with charts. |
| What are the key menu items in Excel's charting tool? | Design (high-level adjustments), Labels (edit titles, legends, and axis options), Format (modify colors and text elements). |
| How do you create a column chart for cash receipts and disbursements? | Select data (e.g., months and totals), insert a 2-D column chart from the Insert tab, and modify it by editing the title and adding data labels. |
| How do you modify the title of an Excel chart? | Change "Chart Title" to a more relevant title, like "Total Cash Collections." |
| What does a side-by-side column chart help visualize? | It helps compare cash receipts (collections) and cash disbursements for the same period. |
| How do you format the legend in a column chart? | Specify the categories (e.g., "Cash Collections" and "Disbursements") to make the chart easier to understand. |
| What is the purpose of adding data labels in Excel charts? | Data labels show the actual value at the outside end of each column, making the data easier to interpret. |
| When should you use a column chart in Excel? | Column charts are best for comparing categories or time periods, such as comparing monthly cash collections to disbursements. |
| How many categories should be displayed on a column chart for clarity? | Limit the number of categories to 10 or fewer for better clarity. |
| What is the difference between column charts and bar charts? | Column charts display data vertically, while bar charts display data horizontally. |
| What is a good title for a chart comparing cash collections and disbursements? | Cash Collections vs. Disbursements |
| What are some other types of charts used in business besides column charts? | Pie charts (compare parts to a whole) and line charts (track trends over time). |
| What key skills are developed when working with Excel charts in this lesson? | Creating column charts, editing labels, and modifying chart titles and axes. |
| What is the benefit of using charts for cash budgeting? | They help analyze cash budgeting and adjust business operations, making financial management more visual and understandable. |
| For what purpose are column charts used? | To compare different categories of items or the same category over time |
| What is the correct way to add labels to each column in a chart? | Click the Edit button under “Horizontal Axis Labels” and reference the appropriate cells. |
| A company is preparing a cash flow budget, forecasting its cash inflows and cash outflows in the future. The results of this cash flow budget are being reviewed by company management. According to the company’s cash budget, when can company management pla | When excess cash is available |
| What are the principal sources of a company’s cash inflows? | Cash sales and the collection of cash from prior credit sales |
Created by:
heavenlypure
Popular Accounting sets