Which of the Following Statements Is Correct

question 102

Multiple Choice

Which of the following statements is correct?

• A) Poor synchronisation of cash flows which results in high cash management costs can be partially offset by increasing disbursement float and decreasing collections float.
• B) The size of a firm's net float is primarily a function of its natural cash flow synchronisation and how it clears its checks.
• C) Lockbox systems are used mainly for security purposes as well as to decrease the firm's net float.
• D) If a firm can speed up its collections and slow down its disbursements, it will be able to reduce its net float.
• E) A firm practicing good cash management and making use of positive net float will bring its check book balance as close to zero as possible, but must never generate a negative book balance.

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Definitions:

Generativity

A concern for establishing and guiding the next generation, typically expressed through parenting, teaching, and community involvement.

Industry

The sector of the economy concerned with production, manufacturing, and distribution of goods and services.

Initiative

The ability to assess and begin tasks independently without needing external motivation or pressure.

Integrity

The quality of being honest and having strong moral principles.