Sound cash management techniques would support
A) minimizing collection float, maximizing disbursement float, and minimizing the cash conversion cycle.
B) minimizing collection float, maximizing disbursement float, and minimizing the cash turnover.
C) maximizing collection float, minimizing disbursement float, and minimizing operating cash.
D) minimizing collection float, maximizing disbursement float, and maximizing operating cash.

Question

Quizplus · Accepted Answer

Sound cash management techniques typically involve minimizing the amount of time that cash is tied up in the various processes of collections, disbursements, and conversions. This can be achieved by minimizing collection float (i.e. the time it takes for payments to be received and deposited), maximizing disbursement float (i.e. the time it takes for checks to clear and funds to be withdrawn), and minimizing the cash conversion cycle (i.e. the time it takes to convert inventory or other assets into cash). Therefore, option A is the best choice as it accurately reflects the most effective cash management techniques.

Sound Cash Management Techniques Would Support