Which of the Following Is Not a Basic Principle of Cash

question 10

Multiple Choice

Which of the following is not a basic principle of cash management?

• A) Increase collection of receivables.
• B) Keep inventory levels low.
• C) Pay all liabilities early.
• D) Invest idle cash.

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Definitions:

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in the business-to-business market, often determined by quantity purchased or early payment.

Inventory Account

An account in the general ledger that tracks the value of items a company holds for sale in the ordinary course of business.

Catalog List Price

The advertised price of goods or services in a catalog before any discounts, rebates, or special offers are applied.

Sales Tax

A tax imposed by a government on the sale of goods and services, typically calculated as a percentage of the selling price.