When Financial Managers Take Action to Minimize the Carrying Costs

question 70

Multiple Choice

When financial managers take action to minimize the carrying costs of current assets, they:

• A)Are likely to maximize profits
• B)Also consider spoilage costs
• C)May increase costs due to shortages
• D)Engage in the matching of maturities

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Definitions:

Salaries Payable

A liability account that records the amounts owed to employees for work performed but not yet paid.

Month-End Adjusting Entry

Journal entries made at the end of the reporting period to update the accounts for accurate financial reporting.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on the balance sheet until they are expensed.

Management Services

Provided by a specialized team or firm, these services include a wide range of administrative and support functions to improve efficiency and effectiveness within an organization.