Which Statement Is Correct

question 9

Multiple Choice

Which statement is correct?

• A)Managers are more interested in the net income than the cash generated by the company
• B)Under GAAP,only the income statement is required by investors,creditors and managers.
• C)All companies must have a treasury department to manage their cash resources.
• D)The cash flow statement shows the capacity of the company to sustain its operations.

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Definitions:

Economic Order Quantity

A calculation used to determine the most cost-effective quantity of stock to order, balancing ordering costs with holding costs.

Total Ordering Costs

The sum of all expenses involved in placing an order, including logistic, administrative, and product costs.

Holding Costs

Expenses incurred from maintaining and storing inventory, such as warehousing costs, insurance, and deterioration losses.

Inventory Quantity

The total number of units of a specific product or category of products that are held in stock by a business at a given time.