Which of These Is Not a Broad Principle of Cash

question 31

Multiple Choice

Which of these is not a broad principle of cash management that helps ensure that a business remains solvent?

• A) Collect cash owing from accounts receivable as quickly as possible.
• B) Pay accounts payable just before the due date rather than when the statement is first received.
• C) Buy all capital equipment on hire purchase.
• D) Invest any cash that is surplus to requirements to earn a return for the business.

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Definitions:

Elastic

Describes a situation in economics where the supply or demand for a good or service is sensitive to changes in price. In other words, a small change in price results in a larger change in quantity demanded or supplied.

Tax Burden

The measure of the total amount of taxes that an individual or business must pay, relative to their income or profit.

Yachts

Luxury vessels used for personal or recreational purposes, often considered a symbol of wealth and luxury.

Rent Controls

Government-imposed limits on the rent that landlords can charge tenants, intended to keep housing affordable.