A flexible short-term financial policy will tend to have more of which of the following than a restrictive short-term financial policy will?
I.uncollectable accounts receivable
II.work stoppages for lack of raw materials
III.carrying costs
IV.obsolete or out-of-date inventory

Question

Quizplus · Accepted Answer

A flexible short-term financial policy would allow for more uncollectable accounts receivable, carrying costs, and obsolete inventory as the policy is not as restrictive in terms of credit and inventory management. With more flexibility, the company may take on more risk in extending credit to customers and holding onto inventory for longer periods. Work stoppages for lack of raw materials may not necessarily be affected by the financial policy, as it is more related to supply chain management and production planning.

A Flexible Short-Term Financial Policy Will Tend to Have More