The Primary Reason That Managers Impose a Minimum Cash Balance

question 138

Multiple Choice

The primary reason that managers impose a minimum cash balance in the cash budget is

• A)because management needs discretionary cash for unforeseen business opportunities.
• B)managers lack discipline to control their spending.
• C)that it protects the organization from the uncertainty of the budgeting process.
• D)that it makes the financial statements look more appealing to creditors.

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Definitions:

Variable-Interval Reinforcement

A reinforcement schedule in which rewards are provided after an unpredictable time interval, leading to reasonably steady response rates.

Slot Machines

Gambling devices that generate random combinations of symbols on a dial, offering players the chance to win money based on the alignment of these symbols.

Extinguish

In psychology, to diminish a conditioned response by repeatedly presenting the conditioned stimulus without the unconditioned stimulus.

Negative Reinforcement

A behavioral psychology principle where the removal of an unfavorable outcome or stimulus strengthens a behavior or increases its likelihood of recurrence.