Which of the Following Statements Is Correct

question 101

Multiple Choice

Which of the following statements is correct?

• A) Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciation),so depreciation is set forth on a separate line in the cash budget.
• B) If cash inflows and cash outflows occur on a regular basis,such as the situation where inflows from collections occur in equal amounts each day and most payments are made regularly on the 10^th of each month,then it is not necessary to use a daily cash budget.A cash budget prepared at the end of the month will suffice.
• C) Cash budgets are more important for fast food retailers,such as McDonald's,which deal primarily with cash than for manufacturers,such as General Motors,that generally sell on credit.
• D) When constructing a cash budget,it probably is easier to forecast cash inflows than cash outflows.
• E) All of the above statements are false.

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Definitions:

Cost

The expenditure or amount of resources (financial, time, labor) required to achieve something.

Time-Series Designs

Research designs that involve repeated measurements of dependent variables over time, both before and after a treatment or intervention, to assess change.

Selection Effects

Biases introduced into research when the participants or subjects are not randomly assigned, potentially leading to unrepresentative samples and skewed results.

Observations

The process of closely monitoring, recording, or noticing specific behaviors, actions, or phenomena, typically as a data collection method in research.