Which of the Following Principles of Cash Management Is Not

question 38

Multiple Choice

Which of the following principles of cash management is not true?

• A) There are disadvantages for a business in holding very low levels of inventory.
• B) The longer the operating cycle the longer it takes to pay creditors.
• C) Payments to creditors should not be delayed if it means discounts on offer are lost.
• D) Generally, cash surpluses should be used to acquire necessary non-current assets rather than being kept in a fixed deposit.

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Definitions:

Domestic Aggregate

A combined total of all economic activities and outputs within a country's borders, often considered in the analysis of economic health.

Interest-bearing Bonds

Debt securities that pay interest to holders, usually at fixed intervals, until the principal amount is repaid at maturity.

Interest Rates

Interest rates are the cost of borrowing money or the payment for offering credit, typically expressed as a percentage of the principal.

Money Supply

The full volume of financial resources in an economy at a particular point.