Which of the Following Is Not a Valid Reason for Holding

question 127

Multiple Choice

Which of the following is not a valid reason for holding cash?

• A) to meet transaction requirements
• B) to earn the highest return possible
• C) to satisfy emergency needs for funds
• D) to provide a compensating balance for a bank

---

Definitions:

Direct Labor-Hour

A measurement of labor used in production, specifically the time spent by direct labor workers on a given job or project.

Manufacturing Overhead Budget

An estimation of all manufacturing overhead costs planned for a specific period, which includes indirect costs related to manufacturing.

Selling and Administrative Expense Budget

A financial plan that estimates future sales, administrative expenses, and related activities over a specific period.

Budget Data

Financial projections that outline expected income and expenses for a company over a specific period.