Exercise 6-4 (Algo) Cash management strategies LO C2 Determine whether each policy below is good or bad cash management; then identify the cash management strategy violated or followed for each policy. Cash payments and receipts are not planned. Instead, the company assumes it will have enough sales to not have to worry about cash shortages. Excess cash is used to acquire productive assets or short-term investments. All buildings are purchased, even those the company only plans to occupy for a few months. The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible. Customers are regularly allowed to pay after due dates.
Exercise 6-4 (Algo) Cash management strategies LO C2 Determine whether each policy below is good or bad cash management; then identify the cash management strategy violated or followed for each policy. Cash payments and receipts are not planned. Instead, the company assumes it will have enough sales to not have to worry about cash shortages. Excess cash is used to acquire productive assets or short-term investments. All buildings are purchased, even those the company only plans to occupy for a few months. The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible. Customers are regularly allowed to pay after due dates.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter6: Statement Of Cash Flows
Section: Chapter Questions
Problem 44P
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Exercise 6-4 (Algo) Cash management strategies LO C2
Determine whether each policy below is good or bad cash management; then identify the cash management strategy violated or followed for each policy.
Cash payments and receipts are not planned. Instead, the company assumes it will have enough sales to not have to worry about cash shortages.
Excess cash is used to acquire productive assets or short-term investments.
All buildings are purchased, even those the company only plans to occupy for a few months.
The company negotiates credit terms with suppliers to delay payment of liabilities as long as possible.
Customers are regularly allowed to pay after due dates.
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