Question

a. Which of the following outcomes identifies the greatest disadvantages associated with a profitable business that...

a. Which of the following outcomes identifies the greatest disadvantages associated with a profitable business that is holding excessive amounts of cash in its unrestricted cash accounts?

A. It will reduce the business' bill payment flexibility
B. It will increase the amount the business will pay to obtain credit from vendors
C. It will reduce the ROI achieved by the business' owners
D. It will increase the ROI achieved by the business' owners

b. In the hospitality industry, cash need are typically at their highest...

A. at the end of an accounting period.
B. when sales are at their lowest.
C. when sales are at their highest.
D. at the beginning of the an accounting period.

c. Which is another name for the individual expense categories listed on an operating budget?

A. Line items
B. Profit centers
C. Cost centers
D. Mixed costs

d. A bar manager estimates the next month's beverage revenue will be $85,200. The bar manager forecasts her Cost of Sales: Beverages for next month to be 22%. What would the amount of this manager's forecasted Cost of Sales: Beverages for next month?

A. $18,744
B. $18,944
C. $38,727
D.

$38,927

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Answer #1

Answers:

a. It will reduce the ROI achieved by the business' owners.

b. When sales are the highest

c. Cost centers

d .$18,744

Explanations:

a.

The greatest disadvantage of holding excessive amounts of cash in unrestricted cash accounts will increase the bill payment flexibility , but reduces the ROI ( Return on Investment) to business' owners. Therefore, option C is the correct option.

b.

In the hospitality industry, cash need are typically not associated with the end or beginning of accounting period, but it is higher when sales are higher. Therefore, option C is the correct option.

c.

Cost centers is the other name for individual expense categories listed on an operating budget. Therefore, the correct option is Option C.

d.

Estimated revenue of next month = $85,200

Cost of sales = 85,200 * 22% = $18,744

Therefore, the right answer is option A.

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