Select all that applyWhich of the statements below describe the goals and principles of cash management?Multiple select question.Plan cash receipts to meet cash payments when due.Encourage quick collection of receivables.Keep a minimum level of cash necessary to operate.Excess cash should be kept on hand to pay bills.Money should be spent only when it is available.Encourage quick payment of liabilities.
Question
Select all that applyWhich of the statements below describe the goals and principles of cash management?Multiple select question.Plan cash receipts to meet cash payments when due.Encourage quick collection of receivables.Keep a minimum level of cash necessary to operate.Excess cash should be kept on hand to pay bills.Money should be spent only when it is available.Encourage quick payment of liabilities.
Solution
The statements that describe the goals and principles of cash management are:
- Plan cash receipts to meet cash payments when due.
- Encourage quick collection of receivables.
- Keep a minimum level of cash necessary to operate.
- Money should be spent only when it is available.
The statement "Excess cash should be kept on hand to pay bills" is not a principle of cash management. Instead, excess cash should be invested to generate returns.
The statement "Encourage quick payment of liabilities" is also not a principle of cash management. While it's important to pay liabilities, doing so quickly can lead to cash flow problems. It's better to pay them when they're due.
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