Which One of the Following Statements Is True

question 136

Multiple Choice

Which one of the following statements is true?

• A) Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account.
• B) Sound internal control practice dictates that disbursements should be made by check.
• C) The person handling the cash should also prepare the bank reconciliation.
• D) Petty cash can be substituted for a checking account to expedite the payment of all disbursements.

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Definitions:

Risk

Exposure to uncertainty or potential financial loss in any given investment or business venture.

Market Risk

The risk of losses in investments caused by factors that affect the entire market, such as economic changes or political events.

Beta

An assessment tool for determining the comparative volatility or systematic risk of a portfolio or security against the market at large.

Volatility

Volatility is a statistical measure of the dispersion of returns for a given security or market index, indicating the degree of variation from the average over a certain period.