Which One of the Following Statements Is Correct Concerning the Cash

question 58

Multiple Choice

Which one of the following statements is correct concerning the cash cycle?

• A)The longer the cash cycle, the more likely a firm will need external financing.
• B)Increasing the trade payabless period increases the cash cycle.
• C)A positive cash cycle is preferable to a negative cash cycle.
• D)The cash cycle can exceed the operating cycle if the payables period is equal to zero.
• E)Adopting a more liberal trade receivables policy will tend to decrease the cash cycle.

---

Definitions:

Revoke Acceptance

The right of a buyer to cancel acceptance of goods received if they substantially fail to conform to the contract, under certain conditions.

Nonconforming Goods

Products delivered under a sales contract that fail to meet quality, specification, or performance requirements.

Substantially Impaired

A situation where the value, function, or utility of something has been significantly reduced or damaged.

Conform to the Contract

The requirement for the goods, services, or conditions provided or received to meet the specifications, quality, and terms outlined in a contractual agreement.