Which Is NOT a Part of Good Working Capital Management

question 38

Multiple Choice

Which is NOT a part of good working capital management?

• A) the maintenance of optimal cash balances
• B) the investment of any excess liquid funds in marketable securities that provide the best return possible, considering any liquidity or default-risk constraints
• C) the proper management of accounts receivable
• D) the extension of long-term debt

---

Definitions:

Expenses Incurred

The costs that have been consumed or used up in the operation of a business, contributing to the generation of revenue.

Adjusting Entries

The process of making entries in the ledger at the end of the accounting period to allocate profits and expenses to their actual period.

Costs Expire

When a cost is recognized as an expense, typically through depreciation for fixed assets or cost of goods sold for inventory, indicating it has been fully utilized in generating revenue.

Journalized

The process of recording financial transactions in a company's journal, which is the first step in the accounting cycle.