Which of the Following Statements Is CORRECT

question 44

Multiple Choice

Which of the following statements is CORRECT?

• A) The cash budget and the capital budget are developed separately, and although they are both important to the firm, one does not affect the other.
• B) Since depreciation is a non-cash charge, it neither appears on nor has any effect on the cash budget.
• C) The target cash balance should be set such that it need not be adjusted for seasonal patterns and unanticipated fluctuations in receipts, although it should be changed to reflect long-term changes in the firm's operations.
• D) The typical cash budget reflects interest paid on loans as well as income from the investment of surplus cash.These numbers, as well as other items on the cash budget, are expected values; hence, actual results might vary from the budgeted amounts.
• E) Shorter-term cash budgets, in general, are used primarily for planning purposes, while longer-term budgets are used for actual cash control.

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Definitions:

Overdose

The ingestion or exposure to a substance in quantities greater than are recommended or generally safe, leading to serious or potentially fatal symptoms.

Freezing Response

A behavioral reaction to a threatening stimulus characterized by immobility and the cessation of all movement, considered a survival mechanism.

Conditioned Emotional Response

The ability of a conditioned stimulus (CS) to elicit emotional reactions as a result of the association of the CS with a painful event.