Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) Shorter term cash budgets, in general, are used primarily for planning purposes while longer term budgets are used for actual cash control.
• B) The cash budget and the capital budget are planned separately and although they are both important to the firm, they are independent of each other.
• C) Since deprecation is a non-cash charge, it does not appear on nor have an effect on the cash budget.
• D) The target cash balance is set optimally such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts, although it is changed to reflect long-term changes in the firm's operations.
• E) The typical actual cash budget will reflect interest on loans and income from investment of surplus cash. These numbers are expected values and actual results might turn out differently.

---

Definitions:

Opposite Charge

A fundamental principle in physics and chemistry where two entities have electrical charges of different signs, such as positive and negative, attracting each other.

Chemical Bond

The force of attraction between atoms or ions that enables the formation of chemical compounds.

Atomic Number

The number of protons in the nucleus of an atom, determining the chemical properties of an element and its place in the periodic table.

Helium

A chemical element with symbol He and atomic number 2, known for being a lightweight, inert gas widely used in balloons and as a coolant.