Which of the Following Practices Best Illustrates Efficient Management of Cash

question 63

Multiple Choice

Which of the following practices best illustrates efficient management of cash?

• A)The accountant records all cash receipts and payments when reconciling the bank account at the end of each month.
• B)Management arranges for a loan to cover projected cash shortages during the production phase of the business cycle each year.
• C)Cash budgets (forecasts)are prepared only one month in advance in order to avoid the need for constant revision.
• D)All cash resources are held in the checking account to maximize liquidity.

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Definitions:

Long Run

A period in economics where all factors of production and costs are variable, allowing companies and industries to adjust to market changes.

Aggregate Supply Analyses

The assessment of the total supply of goods and services that firms in an economy plan on selling during a specific time period at different price levels.

Keynesian

Pertaining to the economic theories and policies of John Maynard Keynes, emphasizing the role of government intervention to ensure full employment and stable economies.

Classical

Pertaining to the school of economic thought that emphasizes free markets, free trade, and the idea that economies self-regulate through supply and demand.