The Primary Reason That Managers Impose a Minimum Cash Balance

question 138

Multiple Choice

The primary reason that managers impose a minimum cash balance in the cash budget is

• A)because management needs discretionary cash for unforeseen business opportunities.
• B)managers lack discipline to control their spending.
• C)that it protects the organization from the uncertainty of the budgeting process.
• D)that it makes the financial statements look more appealing to creditors.

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Definitions:

Aggressive Behaviors

Actions that can cause physical or emotional harm to others, often a manifestation of frustration, anger, or predisposition towards hostility.

Reinforcement

In behavioral psychology, a process in which a stimulus increases the probability of a behavior by either presenting a positive reward (positive reinforcement) or removing a negative condition (negative reinforcement).

Behavioral Approach

A psychological concept focusing on observable behaviors and the ways in which it's possible to alter undesirable behaviors through conditioning.

Punishment

A process in operant conditioning where a response is followed by a stimulus that decreases the likelihood of the response occurring in the future.