If a Firm Has Seasonal Sales,then It Is Highly Likely

question 19

Multiple Choice

If a firm has seasonal sales,then it is highly likely the firm will:

• A)hold extra excess cash throughout the year.
• B)borrow short term for part of the year and invest in marketable securities the rest of the year.
• C)never be able to invest any excess funds.
• D)continually have short-term loans outstanding.
• E)have less volatile cash flows than a comparable firm with constant sales.

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Definitions:

Chart of Accounts

The Chart of Accounts is a systematic list of all accounts used by an organization, essential for classifying and organizing financial transactions within the general ledger.

Expense Account

An account where costs associated with the operations of a business, such as rent, utilities, and salaries, are recorded.

Asset Account

An account that represents a tangible or intangible item of value owned by a company, such as cash, inventory, or equipment.

Revenue Account

An account that records the income earned from normal business operations, such as sales of goods or services.