Which of the Following Are Associated with a Restrictive Short-Term

question 25

Multiple Choice

Which of the following are associated with a restrictive short-term financial policy?
I.Large investments in marketable securities
II.Liberal credit terms for customers
III.Minimal cash balances
IV.Minimal credit sales

• A)I and III only
• B)II and III only
• C)II and IV only
• D)III and IV only
• E)I,II,and III only

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Definitions:

Discount Period

The time frame in which a payment can be made at a discounted rate from the total amount owed.

Perpetual

An inventory system where updates are made continuously to the inventory records, reflecting each sale or purchase.

Periodic Inventory System

An inventory system in which the inventory count and the cost of goods sold calculation are performed at set intervals, typically at the end of an accounting period.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, rather than continuously, often used for calculating cost of goods sold at the end of an accounting period.