All of the following are considered effective cash management principles except:
A)Encouraging collection of receivables by offering discounts for early payments.
B)Keeping only necessary levels of assets.
C)Planning expenditures.
D)Retaining excess cash for unexpected expenditures.
E)Delaying payment of liabilities until the last possible day.

Question

Quizplus · Accepted Answer

Retaining excess cash for unexpected expenditures is not considered an effective cash management principle because it can lead to opportunity costs and inefficient use of resources. Instead, businesses should aim to optimize cash flow and invest excess cash in short-term, liquid investments.

All of the Following Are Considered Effective Cash Management Principles