Which of the Following Are Associated with a Restrictive Short-Term

question 42

Multiple Choice

Which of the following are associated with a restrictive short-term financial policy?
I.little,if any,investment in marketable securities
II.liberal credit terms for customers
III.low cash balances
IV.increasing inventory levels

• A)I and III only
• B)II and IV only
• C)I and IV only
• D)III and IV only
• E)I, II, and III only

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Definitions:

Paid-In Capital in Excess of Par

The amount of capital received from investors for stock, above its par value, also known as additional paid-in capital.

Preferred Stock

A type of stock that gives holders priority over common stockholders in terms of dividend payments and claims on assets in the event of liquidation.

Stock Dividend

A form of dividend payment made by a company to its shareholders in the form of additional shares, rather than cash.

Paid-In Capital

The capital received by a company from investors in exchange for stock, representing funds raised beyond the par value of the shares issued.