Which of the Following Statements Is CORRECT

question 86

Multiple Choice

Which of the following statements is CORRECT?

• A) Shorter-term cash budgets,in general,are used primarily for planning purposes,while longer-term budgets are used for actual cash control.
• B) The cash budget and the capital budget are developed separately,and although they are both important to the firm,one does not affect the other.
• C) Since depreciation is a non-cash charge,it neither appears on nor has any effect on the cash budget.
• D) The target cash balance should be set such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts,although it should be changed to reflect long-term changes in the firm's operations.
• E) The typical cash budget reflects interest paid on loans as well as income from the investment of surplus cash.These numbers,as well as other items on the cash budget,are expected values;hence,actual results might vary from the budgeted amounts.

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Definitions:

State-Dependent Memory

The effect in which a person's memory recall improves when they are in the same mental state as the time the memory was created.

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A condition in which an individual becomes passive and unable to avoid negative situations due to previous experiences of powerlessness.

Vicious Cycle

A situation where a problem causes more problems, creating a worsening circle of issues.

Depression

A common and serious mood disorder that affects how you feel, think, and handle daily activities, characterized by persistent feelings of sadness and loss of interest.