In: Accounting
In the management of cash and marketable securities, the primary concern is profitability. |
False |
For most modern corporations, the more cash they have, the better off they are. |
False |
Minimizing cash balances can improve overall corporate profitability. |
True |
For most firms, the primary motive for holding cash is the transaction motive. |
True |
Cash balances are usually determined by the amount of cash flowing through the firm on a yearly basis. |
False |
A primary goal of cash management is to insure that the inflows and outflows of cash are synchronized. |
True |
It is possible for companies to operate with negative cash balances on their books. |
True |
If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,000. | True |
When a potential customer has a mediocre credit history, a firm should never consider allowing them to become a customer. |
False |
If a company would like to reduce their average collection period, they can either offer a cash discount or increase their net terms. |
True |