Which of the Statements Below Is FALSE

question 81

Multiple Choice

Which of the statements below is FALSE?

• A)A simple monthly cash flow estimate allows managers to anticipate periods when the company may need to borrow and periods when the company will have excess cash for investing.
• B)There is a problem in managing cash if sales are low for several months,causing a negative balance and delaying payments to suppliers or employees.
• C)There are four basic ways to handle cash surpluses: Savings; Unsecured Loans (Commercial Paper,Trade Credit,or Banker's Acceptance); Secured Loans (Using Accounts Receivable or Inventories); and Other Sources (Letters of Credit).
• D)By far the simplest way to cover a cash deficit is to take money out of one's savings account-provided,of course,that one has sufficient savings to cover the necessary transfer.

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Definitions:

Tax Advantage

A financial benefit given by government regulations that reduces taxes for businesses and individuals.

Inventory Items

Goods or materials that a business holds for the purpose of sale or production in the normal course of operation.

Estimating Value of Inventory

The process of calculating the worth of unsold goods at the end of an accounting period using methods such as FIFO or LIFO.

Gross Profit Method

An inventory estimation technique that calculates the cost of goods sold by deducting sales revenue from the gross profit percentage.