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

Cash management principles do not include

  1. earning the greatest return possible on excess cash.
  2. paying suppliers promptly.
  3. speeding up collection from customers.
  4. delaying payment of suppliers.

To determine

Introduction: Cash management control is very important for business day to day transaction, because in the normal days company purchase the raw material, salary payment, factory rent payment like other normal transaction. Company need cash on the daily basic.

To choose: What is not include in the cash management principal.


Explanation for correct answers:

Option (b) Cash management wants that company not made payment instantly to creditor because cash manager wants that company able to pay amount on time. If company is not able to pay the money on time due to lack of money then company goes to be insolvent.

Explanation for incorrect answers:

Option (a) Earning the greatest return possible on excess cash. Company always want that extra money must be invested because earning some interest...

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