Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) Shorter term cash budgets, in general, are used primarily for planning purposes while longer term budgets are used for actual cash control.
• B) The cash budget and the capital budget are planned separately and although they are both important to the firm, they are independent of each other.
• C) Since deprecation is a non-cash charge, it does not appear on nor have an effect on the cash budget.
• D) The target cash balance is set optimally such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts, although it is changed to reflect long-term changes in the firm's operations.
• E) The typical actual cash budget will reflect interest on loans and income from investment of surplus cash. These numbers are expected values and actual results might turn out differently.

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Definitions:

Rousseau

Jean-Jacques Rousseau, an 18th-century philosopher known for his contributions to political philosophy and education.

Rogers

Refers to Carl Rogers, an influential American psychologist who founded the humanistic approach to psychology.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions.

Emotion

A complex reaction pattern, involving experiential, behavioral, and physiological elements, by which an individual attempts to deal with a personally significant matter or event.