The Demand for Money as a Cushion Against Unexpected Contingencies

question 24

Multiple Choice

The demand for money as a cushion against unexpected contingencies is called the

• A)transactions motive.
• B)precautionary motive.
• C)insurance motive.
• D)speculative motive.

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Definitions:

Financial Statement

Reports that summarize the financial performance, position, and cash flows of a business for a specific period.

Account

An account is a record within an accounting system that is used to store financial transactions of a particular type, such as assets, liabilities, equity, revenues, and expenses.

Withdrawals

Money or other assets taken out from a business by its owner(s) for personal use.

Accounts Receivable

The financial claim a company holds against its customers for sales made on credit, indicating future cash inflows.