MCQ on Receivable Management: Check the below Financial and Strategic Management MCQ on Receivable Management with Answers Pdf free download. Financial and Strategic Management MCQ on Receivable Management Questions for Financial and Strategic Management with Answers were prepared based on the latest exam pattern. We have provided Financial and Strategic Management MCQ on Receivable Management with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Receivable Management Questions with Answers based on the latest syllabus.

MCQ on Receivable Management

1. The goal of receivables management is to maximize the value of the firm by achieving a trade-off between –
(A) Risk & Profitability
(B) Liquidity & Profitability
(C) Return & Profitability
(D) Return & Liquidity

2.

3. Which of the following function is required to be performed by the finance manager in relation to proper management of receivables?
(A) To obtain the optimum (not maximum) value of sales
(B) To adopt a relaxed policy for administrative expense
(C) To increase the opportunity cost of funds blocked in the receivables
(D) To make more purchases at bigger discounts

4. The cash discount is given to customers for:
(A) Early payments
(B) Good business relations
(C) Bulk purchase
(D) Frequent purchases

5. The accounts receivable that cannot be collected because of their bankruptcy or another reason are termed as:
(A) Collectible accounts
(B) Bad customers
(C) Doubtful accounts
(D) Uncollectible accounts

6. Risk of non-payment may due to –
(A) Insolvency
(B) Liquidity problems
(C) Intention of cheating
(D) All of the above

7. A decrease in the firm’s receivables turnover ratio means that –
(A) it is collecting credit sales more quickly than before
(B) it is collecting credit sales more slowly than before
(C) sales have gone down
(D) inventories have gone up

8. Which of the following sentence describes a correct strategy for the proper administration of receivables?
(A) Most of the firms dissuade credit sales to first-time customers.
(B) Promoting cash sales
(C) Firms must have special staff earmarked for recovery efforts.
(D) (A) and (C)

9. What do we call, when a firm extends credit terms that encourage the buyers of certain products to take delivery before the peak sales period and to defer payment until after the peak sales period?
(A) Trade account
(B) Cash discount
(C) Peak trade account
(D) Seasonal dating

10. Accounts receivable are reported in the balance sheet:
(A) At face value
(B) At a gross value
(C) At a net realizable value
(D) At net credit sales value

11. Credit rating is a study of the credit standing of a customer i.e. 5 C’s. Which of the following correctly describes those 5 C’s?
(A) Character, Capacity, Capital, Conditions & Collateral security
(B) Character, Capacity, Complaint, Conditions & Collateral security
(C) Character, Charm, Capital, Con-ditions & Collateral security
(D) Charter, Capacity, Capital, Conditions & Collateral security

12. ____ may also be offered for the early payment of dues.
(A) Trade discounts
(B) Special discounts
(C) Cash discounts
(D) Both (A) and (B)

13. Increasing the credit period from 30 to 60 days, in response to a similar action taken by all of our competitors, would likely result in:
(A) An increase in the average collection period
(B) A decrease in bad debt losses
(C) An increase in sales
(D) Higher profits

14. Place the methods of collecting on delinquent accounts from the most likely lowest to highest cost.
(A) Letters, phone calls, legal action, and personal visits
(B) Phone calls, letters, legal action, and personal visits
(C) Letters, phone calls, personal visits, and legal action
(D) Personal visits, phone calls, letters, and legal action

15. Which of the following may be a reason why you would choose a policy with a higher Average Collection S Period (ACP)?
(A) a Lower percentage of collections inmate, dates
(B) Higher percentage of collections in early dates
(C) a Lower percentage of collections in early dates
(D) Higher percentage of collections in middle dates

16. ______ is an arrangement to have debts collected by a third party entity for a fee.
(A) Factoring
(B) Aging
(C) Forming
(D) Crediting

17. In ______ type of factoring the bank/factor takes all the risk and bears all the loss in case of debts becoming bad debts.
(A) Non-Recourse Factoring
(B) Invoice Discounting
(C) Maturity Factoring
(D) Recourse Factoring

18. Selling accounts receivable to a third party at a reduced price is part of the collection process known as –
(A) Settling
(B) Writing off
(C) Suing
(D) Factoring

19. Which one of the following would help to reduce the number of accounts receivable delinquencies?
(A) Ease the credit approval process
(B) Know your customer situations
(C) Refuse to extend payments
(D) Stop sending reminder letters

20. An important means to get an insight into the collection pattern of debtors is the preparation of their –
(A) List of proposed discount
(B) Discount schedule
(C) Schedule of personal formation of debtors
(D) Ageing Schedule

Follow on Facebook

By Team Learning Mantras