Three Essential Needs of a Well-Operating Financial System Include All

question 117

Multiple Choice

Three essential needs of a well-operating financial system include all of the following EXCEPT:

• A)an efficient national payments system
• B)an elastic or flexible money supply
• C)a bank insurance system
• D)a lending/borrowing mechanism

---

Definitions:

Operating Activities

Operating activities involve the primary revenue-generating activities of a business, such as sales and delivery of goods/services, and are reflected in the cash flow statement.

Credit Sales

Transactions in which goods or services are provided to a customer with the agreement that payment will be made at a future date.

Collections

The process of pursuing payments of debts owed by individuals or businesses, often managed by accounts receivable departments or collection agencies.

Noncash Financing

Activities that increase long-term liabilities or equity but do not involve the immediate receipt or payment of cash, such as issuing stock or converting debt to equity.