Maintaining Liquid Assets That You Can Easily Access When You

question 106

True/False

Maintaining liquid assets that you can easily access when you need funds allows you to avoid using credit and paying finance charges.

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Definitions:

Dividends Declared

Profits that a company's board of directors has decided to distribute to its shareholders, typically in the form of cash payments or additional shares.

Cash Account

A financial account that records cash transactions, both receipts and disbursements, within a business.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company to reinvest in its core business or to pay debt.

Liability Account

An accounting record that captures the amounts a company owes to creditors.