Which of the Following Statements Is Correct

question 3

Multiple Choice

Which of the following statements is correct?

• A)Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciations), so depreciation is set forth on a separate line in the cash budget.
• B)If cash inflows and cash outflows occur on a regular basis, such as the situation where inflows from collections occur in equal amounts each day and most payments are made regularly on the 10th of each month, then it is not necessary to use a daily cash budget.A cash budget prepared at the end of the month will suffice.
• C)Lockboxes are more important for fast food retailers such as McDonald's which deal primarily with cash than for manufacturers such as Xerox which are generally paid by check.
• D)A concentration banking system should not be used by firms that collect customers' payments using lockbox arrangements.
• E)Statements a, b, c, and d are all false.

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Definitions:

Mutual Adjustment

A process of communication and negotiation between parties to adapt to each other's needs or actions.

Mechanistic

Describing a structure or process that is rigidly managed and organized, often emphasizing efficiency, precision, and control.

Differentiation

The process of distinguishing or creating differences, often used in contexts like strategy, where companies make their products or services stand out from competitors.

Standardization

The process of implementing and developing technical standards based on the consensus of different parties to ensure that materials, products, processes, and services are appropriate for their purpose.