Which of the Following Would Be Considered the Least Effective

question 33

Multiple Choice

Which of the following would be considered the least effective management of cash?

• A) Protect cash and ensure cash is available to pay debts as they fall due.
• B) Protect cash and enable accurate reporting of cash.
• C) Enable accurate reporting of cash
• D) Ensure cash is available to pay debts as they fall due and allow idle cash to be invested.

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Definitions:

Average Operating Assets

The average value of the assets used in the normal operations of a business over a period.

Stockholders' Equity

Stockholders' Equity is the portion of a company's assets that belongs to shareholders after all liabilities have been subtracted, also known as shareholders' equity.

Net Operating Income

Earnings from a company’s primary business activities, discounting the effects of financing and tax considerations.

Residual Income

The net operating income that an investment center earns above the minimum required return on its operating assets.