Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881



Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem

High level cash management strategies include

  1. bank reconciliations
  2. cash over and short
  3. petty cash
  4. delaying payment for suppliers

To determine

Introduction: Companies use policies related to cash management to earn maximum interest on invested money. Principles of cash management are followed through the entire operating cycle. To choose: The option that states the cash management policy at a high level.


Explanation for correct option: Companies follow cash management policies so as keep their money safe and earn as much as return as possible. Generally, companies tend to delay payments to suppliers so as to earn maximum interest on the available cash. This increases their earnings for the operating cycle and later payment is made to suppliers via cash available and interest earned.

Explanation for incorrect options: Companies carry out internal control procedure to safeguard its assets...

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