1) Monthly cash expenses are

a.referred to as cash burn.

b.estimated from the Financing section of the cash flow statement.

c.estimated from the Investing section of the cash flow statement.

d.None of these choices are correct.

2) Compensating balances are

a.desired loan amounts.

b.amounts of required payments on liabilities.

c.balances banks may require depositors to maintain as a minimum in their cash accounts.

d.requested lines of credit.

3) Which of the following isnotan internal control activity for cash?

a.All cash payments should be made with cash.

b.Banking facilities should be used as much as possible.

c.All cash receipts should be recorded promptly.

d.Surprise audits of cash on hand should be made occasionally.

4) Which one of the following wouldnotcause a bank to debit a depositor's account?

a.Bank service charge

b.Checks marked NSF

c.Interest earned by the account

d.Wiring of the depositor's funds to other locations

5) Cash equivalents

a.are illegal in some states.

b.are highly liquid investments that earn interest.

c.will be converted to cash within two years.

d.will be converted to cash within 120 days.