Which of the Following Statements Concerning Cash Management Is False

question 103

Multiple Choice

Which of the following statements concerning cash management is false?

• A)Cash is the most important, yet least productive, asset a small business owns.
• B)Young companies tend to be "cash sponges," soaking up every available dollar of cash.
• C)Fast-growing businesses are least likely to experience shortages.
• D)Cash management involves forecasting, collecting, disbursing, investing, and planning for a company's cash needs.

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Definitions:

Absorption Costing

A costing approach that encompasses all costs associated with production, including direct materials, direct labor, and all overhead costs, both variable and fixed, in the unit cost of a product.

Ending Inventory

The total value of all unsold goods a company has at the end of an accounting period.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the basic profitability of the products or services sold.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the price of a product.