Which One of the Following Statements Is Correct Concerning the Cash

question 20

Multiple Choice

Which one of the following statements is correct concerning the cash cycle?

• A)The longer the cash cycle, the more likely a firm will need external financing.
• B)Increasing the accounts payable period increases the cash cycle.
• C)A positive cash cycle is preferable to a negative cash cycle.
• D)The cash cycle can exceed the operating cycle if the payables period is equal to zero.
• E)Offering early payment discounts to customers will tend to increase the cash cycle.

---

Definitions:

Memory

The faculty by which the mind stores and remembers information, enabling learning and retention of experiences.

Automatic Reflex

An automatic reflex is an involuntary and nearly instantaneous movement in response to a stimulus, not requiring conscious thought.

Obsessive-Compulsive Checkers

Individuals who excessively check things (such as locks, appliances, and switches) due to fears and anxieties related to obsessive-compulsive disorder.

Obsessive-Compulsive Cleaners

Individuals who experience a compulsive need to clean or organize as a symptom of obsessive-compulsive disorder (OCD).