Which of the Following Statements Is CORRECT

question 63

Multiple Choice

Which of the following statements is CORRECT?

• A) Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciation), hence depreciation is set forth on a separate line in the cash budget.
• B) If cash inflows from collections occur in equal daily amounts but most payments must be made on the 10th of each month, then a regular monthly cash budget will be misleading. The problem can be corrected by using a daily cash budget.
• C) Sound working capital policy is designed to maximize the time between cash expenditures on materials and the collection of cash on sales.
• D) If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from 2/10, net 30 to net 60.
• E) If a firm sells on terms of net 90, and if its sales are highly seasonal, with 80% of its sales in September, then its DSO as it is typically calculated (with sales per day = Sales for past 12 months/365) would probably be lower in October than in August.

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Definitions:

Clients Learn

A general phrase indicating the process by which individuals receiving therapy or counseling gain insight, skills, and coping mechanisms.

Serious Problems

Major issues or difficulties that significantly impact an individual's life or situation, requiring urgent attention or resolution.

Community Psychology

A branch of psychology focused on understanding individuals within their social, cultural, economic, geographic, and political contexts and addressing societal issues.

Emphasis on Prevention

The focus on preventing health problems or societal issues before they start, rather than treating them after they occur.