Issues That Require an Entity to Manage Its Cash Include

question 28

Multiple Choice

Issues that require an entity to manage its cash include:

• A) the cost of not having enough cash.
• B) the need to have sufficient cash to meet commitments.
• C) the timing of cash flows.
• D) all of these issues require cash management.

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Definitions:

Treasury Shares

Shares that were once outstanding and have been bought back by the company, which may be held in the company's treasury.

Short-term Investments

Investments that are expected to be converted into cash within one year or during the next operating cycle, whichever is longer.

Capital Acquisitions Ratio

A measure of a company's ability to fund capital expenditures from internal cash flow, impacting its long-term sustainability.

Operating Activities

Activities that relate directly to the primary operations of a company, such as selling goods and services.