Select the Correct Statement

question 20

Multiple Choice

Select the correct statement.

• A) To remain competitive it is usually best for a firm to take longer to collect money owing by trade debtors.
• B) By lessening control over trade debtors, it may be possible for the firm to make debtors balances available for other purposes.
• C) By exercising tighter control over trade debtors, it may be possible for a firm to release funds for other purposes.
• D) None of the statements is correct.

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Definitions:

Commodity Money

Money that has intrinsic value because it is made of a commodity with its own value, such as gold or silver.

Intrinsic Value

The inherent or true value of an asset, investment, or company, based on underlying perception of its true value including all aspects of the business.

First Bankers

This refers to individuals or institutions that were among the earliest to engage in banking activities, such as accepting deposits and making loans.

Goldsmiths

Historically, craftsmen who made objects out of gold, but in financial history, they are known for keeping gold deposits and issuing paper bank notes redeemable for gold.