1. Which one of the following represents a use of cash? a) Decrease in inventory b) Sale of preferred stock c) Decrease in accounts receivable d) Decrease in accounts payable 2. The operating cycle is based on thoe: a) Cash cycle plus Accounts Receivable periocd b) Inventory period plus Accounts Receivable period c) Accounts Payable period minus Cash cycle d) Accounts Payable period minus Accounts Receivable period 3. If your firm decides to it needs to pay its suppliers 7 days sooner than before, then: a) its payable turnover rate will decrease. b) its accounts receivable period will increase. c) it may require additional funds from other sources to fund the cash cycle. d) its cash cycle will decrease. 4. Which of the following is indicative of a short-term restrictive financial policy? a) purchasing inventory only as needed b) granting credit to more customers c) increased investment in marketable securities d) maintaining a large accounts receivable balance 5. Stevic Industries is a seasonal firm specializing in pool furniture. Stevic purchases inventory one month before it is sold and pays for its purchases 60 days after the invoice date. Sales are highest during July and August. For purposes of preparing the firm's cash budget, which of the following is correct? a) Inventory purchases will be highest during the months of July and August. b) Inventory purchases will be highest during the months of May and June. c) Payments to suppliers will be highest during the months of July and August. d) Payments to suppliers will be highest during the months of August and September. 6. A zero-balance account: a) is used to cover the compensating balance requirement of a line of credit agreement. b) is funded on an as-needed basis only e) is only used to deposit funds received at local lockboxes. d) requires a compensating balance