The Affirmative Purpose of Planning Is to Minimize Risk by Reducing

question 62

True/False

The affirmative purpose of planning is to minimize risk by reducing the uncertainties surrounding business conditions and clarifying the consequences of related management activities.

---

Definitions:

Maturity Factoring

A financing method where a business sells its invoices to a factor at a discount but receives payment only when the customer pays the invoice at maturity.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to raise immediate capital.

Inventory

A company's stock of the products available for sale to customers, as well as raw materials and work-in-progress that will eventually become finished goods.

Accounts Receivable

Funds that are due to a business from its clients for goods or services already provided but not yet compensated for.