Determine whether each policy below is good or bad cash management, then identify the cash management strategy violated or followed for each policy. 1. The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible 2. Excess cash is put in checking accounts, earning no interest income. 3. Cash receipts and cash payments are regularly planned and reviewed. 4. Customers are offered discounts to pay early. 5. All equipment is purchased, even equipment infrequently used. Good or Bad Cash Management Strategy
Determine whether each policy below is good or bad cash management, then identify the cash management strategy violated or followed for each policy. 1. The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible 2. Excess cash is put in checking accounts, earning no interest income. 3. Cash receipts and cash payments are regularly planned and reviewed. 4. Customers are offered discounts to pay early. 5. All equipment is purchased, even equipment infrequently used. Good or Bad Cash Management Strategy
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Determine whether each policy below is good or bad cash management, then identify the cash management strategy violated or followed for each policy.
1. The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible
2. Excess cash is put in checking accounts, earning no interest income.
3. Cash receipts and cash payments are regularly planned and reviewed.
4. Customers are offered discounts to pay early.
5. All equipment is purchased, even equipment infrequently used.
Good or Bad
Cash Management Strategy
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