A
What is the primary purpose of the flow of funds in an organization?
A. To increase employee salaries
B. To track the movement of money into and out of the business
C. To monitor customer complaints
D. To advertise products
B. To track the movement of money into and out of the business
Which of the following is an example of cash inflow?
A. Paying taxes
B. Purchasing inventory
C. Collecting accounts receivable
D. Paying employee salaries
C. Collecting accounts receivable
What happens if cash outflows consistently exceed cash inflows?
A. The company becomes more profitable.
B. The company may face liquidity problems.
C. Sales automatically increase.
D. Assets increase without liabilities.
B. The company may face liquidity problems.
Which of the following is considered a source of funds for a business?
A. Payment of utility bills
B. Purchase of equipment
C. Bank loan
D. Payment of wages
C. Bank loan
Why is managing the flow of funds important in an organization?
A. To reduce customer satisfaction
B. To ensure the business has enough cash to meet its obligations
C. To eliminate all business risks
D. To avoid paying taxes
B. To ensure the business has enough cash to meet its obligations
Which transaction increases the organization's cash inflow?
A. Payment of dividends
B. Purchase of office supplies
C. Sale of goods for cash
D. Payment of rent
C. Sale of goods for cash
Which activity represents an application (use) of funds?
A. Issuing shares of stock
B. Receiving cash from customers
C. Paying suppliers for inventory
D. Obtaining a bank loan
C. Paying suppliers for inventory
Which of the following is considered an internal source of funds?
A. Bank loan
B. Sale of old equipment
C. Issuing bonds
D. Borrowing from suppliers
B. Sale of old equipment
Why should businesses prepare a cash budget?
A. To estimate future cash inflows and outflows
B. To calculate employee performance
C. To determine product quality
D. To advertise new products
A. To estimate future cash inflows and outflows
Which financial statement best helps explain the movement of cash in and out of a business?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Changes in Equity
B. Statement of Cash Flows
A company purchases new machinery using cash. This transaction is classified as:
A. Source of funds
B. Cash inflow
C. Use of funds
D. Revenue
C. Use of funds
A business receives ₱500,000 from investors. This transaction is classified as:
A. Use of funds
B. Source of funds
C. Operating expense
D. Cash outflow
B. Source of funds
Which department is mainly responsible for monitoring the organization's flow of funds?
A. Marketing Department
B. Human Resources Department
C. Finance Department
D. Production Department
C. Finance Department