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Question 1 of 10
1. Question
The time between dispatch of goods and the issuance of an invoice is known as:
Correct
The time between dispatch of goods and the issuance of an invoice is known as ‘system’ or ‘invoicing’ float.
Incorrect
The time between dispatch of goods and the issuance of an invoice is known as ‘system’ or ‘invoicing’ float.
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Question 2 of 10
2. Question
Identify the name of the float during the process of “order received to goods dispatched”:
Correct
Order received to Goods dispatched= Production float
Incorrect
Order received to Goods dispatched= Production float
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Question 3 of 10
3. Question
Which formula is used to quantify the cost/benefit of the float?
Correct
Cost/benefit of float = Amount x No of days/ Year basis x Cost of funds
Incorrect
Cost/benefit of float = Amount x No of days/ Year basis x Cost of funds
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Question 4 of 10
4. Question
What should be a major part of any cash management review?
Correct
Recognition of sub‐optimal float management should be a major part of any cash management review.
Incorrect
Recognition of sub‐optimal float management should be a major part of any cash management review.
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Question 5 of 10
5. Question
Select all that applies:
Identify the areas where cash managers can seek to improve and manage float more efficiently:Correct
Here are a number of areas where cash managers can seek to improve and manage float more efficiently.
• Change internal systems:
• invoice immediately on dispatch of goods
• integrate invoicing with dispatching system
• deliver invoice electronically or via the web
• renegotiate/reduce credit periods
• invoice in correct currency
• encourage electronic payment by quoting bank account details on invoice (including, where appropriate, international bank account numbers, business identifier codes or other account numbers)
• Change customer behaviour:
• offer discounts for prompt settlement
• introduce direct debiting (very common in certain regions and especially in Europe)Incorrect
Here are a number of areas where cash managers can seek to improve and manage float more efficiently.
• Change internal systems:
• invoice immediately on dispatch of goods
• integrate invoicing with dispatching system
• deliver invoice electronically or via the web
• renegotiate/reduce credit periods
• invoice in correct currency
• encourage electronic payment by quoting bank account details on invoice (including, where appropriate, international bank account numbers, business identifier codes or other account numbers)
• Change customer behaviour:
• offer discounts for prompt settlement
• introduce direct debiting (very common in certain regions and especially in Europe) -
Question 6 of 10
6. Question
The timing of the operating cycle is such that outflows often occur:
Correct
The timing of the operating cycle is such that outflows often occur before inflows
Incorrect
The timing of the operating cycle is such that outflows often occur before inflows
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Question 7 of 10
7. Question
Select more than one answer:
Internally liquidity can be found in:Correct
Internally liquidity can be found in:
• pools of cash in the company (if these pools are in different currencies or geographically dispersed, it may be difficult to use these funds effectively)
• ongoing operations and sales receipts
• selling the company’s liquid assets
• improving collection methodsIncorrect
Internally liquidity can be found in:
• pools of cash in the company (if these pools are in different currencies or geographically dispersed, it may be difficult to use these funds effectively)
• ongoing operations and sales receipts
• selling the company’s liquid assets
• improving collection methods -
Question 8 of 10
8. Question
A source of liquidity to the company that is outside of the control of the cash manager refers to:
Correct
Shareholder capital is also a source of liquidity to the company but is outside of the control of the cash manager.
Incorrect
Shareholder capital is also a source of liquidity to the company but is outside of the control of the cash manager.
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Question 9 of 10
9. Question
Value‐dating is the practice of a bank dating a customer transaction at some date other than the date at which the bank:
Correct
Value‐dating is the practice of a bank dating a customer transaction at some date other than the date at which the bank itself lost or gained value
Incorrect
Value‐dating is the practice of a bank dating a customer transaction at some date other than the date at which the bank itself lost or gained value
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Question 10 of 10
10. Question
Select the most accurate statement for Value-dating?
Correct
Value‐dating is the practice of a bank dating a customer transaction at some date other than the date at which the bank itself lost or gained value. It is used by banks in some countries as a method of compensation. It can be applied to all methods of payment, electronic and physical, both forwards and backward in time and for international and domestic payments.
Incorrect
Value‐dating is the practice of a bank dating a customer transaction at some date other than the date at which the bank itself lost or gained value. It is used by banks in some countries as a method of compensation. It can be applied to all methods of payment, electronic and physical, both forwards and backward in time and for international and domestic payments.