Laurie's Ice Rink Keeps an Extra $1,000 in Its Checking

question 9

Multiple Choice

Laurie's Ice Rink keeps an extra $1,000 in its checking account simply in case an emergency arises.Which type of motive for holding cash does this represent?

• A)Speculative
• B)Float requirement
• C)Transaction
• D)Precautionary
• E)Availability

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Definitions:

Lumber

Refers to processed wood used for construction or other purposes.

Steel

A hard, strong alloy mainly consisting of iron and carbon, widely used in construction and manufacturing.

Period Cost

Accounting costs directly expensed in the period incurred, distinct from costs associated with production which are capitalized.

Advertising Expense

Costs incurred to promote products, services, or the company brand through various advertising mediums.