Lesson 14: MANAGING THE FINANCE FUNCTION

Question 1

Process Flow
* Determination of ______
* _______ of Fund Requirements
* Effective and Efficient Use of _____

Answer 1

Fund Requirements
Procurement
Funds

Question 2

Revenue generated from immediate sales of products or services.

Answer 2

Cash sales

Question 3

Cash received from customers who have purchased goods or services on credit.

Answer 3

Collection of accounts receivables

Question 4

Obtaining funds from external sources like banks or financial institutions.

Answer 4

Loans and Credits

Question 5

Selling company assets to generate cash.

Answer 5

Sales of assets

Question 6

Injecting additional capital from the business owners.

Answer 6

Owner contribution

Question 7

Receiving upfront payments from customers for future deliveries or services.

Answer 7

Advances from customers

Question 8

Short-Term Sources of
Funds

(2)

Long-Term Sources of
Funds

(3)

Answer 8

Short-Term Sources of
Funds

1.Loans
2.Credits

Long-Term Sources of
Funds

1.Long-term debts
2.Common Stocks
3.Retained Earnings

Question 9

An organized strategy for protecting and conserving assets and people. Its purpose is to choose intelligently from among all the available methods of dealing with risk in order to secure the economic survival of the firm.

Answer 9

Risk Management

Question 10

Types of Risks

Answer 10

1.Pure Risk
2.Speculative Risk

Question 11

is a method of handling risk
wherein the management assumes the risk.

Answer 11

Risk Retention

Question 12

also called Self-Insurance, is a conscious and deliberate assumption of a recognized risk.

Answer 12

Planned Risk Retention

Question 13

exists when management does not recognize that a risk exists and unwisely believes that no loss could occur.

Answer 13

Unplanned Risk Retention