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:

Perpetual Inventory

A method of inventory management where record keeping is updated continuously as transactions occur, providing a real-time view of stock levels.

Inventory Account

A financial account that tracks the cost of inventory a company has purchased to sell, including raw materials, work-in-progress, and finished goods.

FOB Destination

A shipping term indicating that the seller bears the transportation cost and risk until the goods are delivered to the buyer's location.

Sales Discount

A sales discount is a reduction in the price of goods or services offered by a seller to a buyer, typically to encourage early payment or bulk purchases.