14. Which one of the following statements is correct concerning the cash balance

Question

14. Which one of the following statements is correct concerning the cash balance of a firm? A. Most firms attempt to maintain a zero cash balance at all times. B. The cumulative cash surplus shown on a cash budget is equal to the ending cash balance plus the minimum desired cash balance. C. On a cash balance report, the cumulative cash surplus at the end of May is used as June's beginning cash balance. D. A cumulative cash deficit indicates a borrowing need. E. The ending cash balance must equal the minimum desired cash balance.

Explanation / Answer

B. The cumulative cash surplus shown on a cash budget is equal to the ending cash balance plus the minimum desired cash balance

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