Which of the Following Statements Is NOT CORRECT

question 56

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.
• B) The cash budget is useful to help estimate future financing needs, especially the need for short-term working capital loans.
• C) 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.
• D) Managing working capital is important because it influences financing decisions and the firm's profitability.
• E) A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, profits, and cash flows during the coming year.

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Definitions:

14th Century

The period extending from the year 1301 to 1400 in the Gregorian calendar, marked by significant historical events globally.

After World War II

The period following the end of the second global conflict in 1945, characterized by the establishment of the United Nations, the beginning of the Cold War, and significant social and economic changes worldwide.

Overdraft

An amount beyond what is currently in the account.

Bank Account

A financial account maintained by a bank or other financial institution for the deposit and withdrawal of money by the account holder.