When a fiRm Makes Decisions Regarding Its Investment in Inventory

question 228

Multiple Choice

When a firm makes decisions regarding its investment in inventory and accounts receivable it is making a ________________ decision.

• A) capital budgeting
• B) capital structure
• C) financing
• D) working capital
• E) dividend policy

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Definitions:

Accounts Payable

Obligations or amounts owed by a company to suppliers for goods or services that have been received but not yet paid for.

Accounts Receivable

Money owed to a company by its debtors for goods or services that have been delivered or used but not yet paid for.

Chart of Accounts

An organized list of all the accounts in a company’s general ledger, used for recording transactions in the accounting system.

Income Statement

A financial document that reports a company's financial performance over a specific period, showing revenues, expenses, and net income or loss.