Which of the Following Is a Principle of Good Cash

question 6

Multiple Choice

Which of the following is a principle of good cash management?

• A) Investing surplus cash.
• B) Keeping inventory at a level where no item required by a customer is ever out of stock.
• C) Paying creditors before the due date.
• D) Offering large cash discounts to debtors to pay within 30 days.

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Definitions:

Teamwork

The collaborative effort of a group to achieve a common goal or complete a task in the most effective and efficient way.

Short-Run Equilibrium

A state where supply and demand are balanced at a particular price level within a short time frame, especially in markets or within firms.

Long-Run Equilibrium

A state where there is no tendency for economic variables, such as prices, outputs, or employment, to change, because all agents in the economy have fully adjusted to any changes.

Efficient Scale

The level of production at which a firm can produce its goods at the lowest average cost, optimizing resource use.