The following are goals‘and objectives in working-capital management. Which is the LEAST ACCURATE? a. Payables management includes the analysis of the business's use of trade payables and short-term non-trade payables but not long-term non-trade payables. b. Availability of money marketable securities support the cash management function by providing a return on excess cash. c. Receivable management involves setting the credit term but not the implementation of how receivables are collected. d. Inventory management allows the entity to determine the best level of this asset while balancing the risk of over- and under- stocking.
The following are goals‘and
objectives in working-capital
management. Which is the LEAST
ACCURATE?
a. Payables management includes the analysis of the business's use of trade payables and short-term non-trade payables but not long-term non-trade payables.
b. Availability of
c. Receivable management involves setting the credit term but not the implementation of how receivables are collected.
d. Inventory management allows the entity to determine the best level of this asset while balancing the risk of over- and under- stocking.
Working capital is the capital required for the day-to-day operation of the business. If this amount is too high it results in unnecessary blockage of funds and if it is too low, it results in the inability to meet current liabilities. Hence it needs to be maintained at an optimal level.
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