Which of the following statements most accurately describes the modern approach to cash management?
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A. B. C. D.C
The most accurate statement that describes the modern approach to cash management is option C - "Cash management involves the efficient processing, collection, and depositing of cash."
Cash management refers to the process of managing a company's or an individual's cash flows, including the collection, disbursement, and investment of cash. The modern approach to cash management emphasizes the importance of maximizing cash flows while minimizing the costs associated with managing cash.
Option A, "Cash management involves the efficient disbursement of cash," is too narrow in scope as it only focuses on the outflow of cash. In reality, cash management involves both inflows and outflows of cash.
Option B, "Cash management involves the efficient collection and disbursement of cash," is more comprehensive than option A as it includes both the inflows and outflows of cash. However, it misses the step of processing cash, which is an essential part of cash management.
Option D, "Cash management involves the efficient processing and depositing of cash," is also too narrow in scope as it focuses only on processing and depositing cash. Efficient cash management requires not only efficient processing and depositing but also efficient collection and disbursement of cash.
Option C, "Cash management involves the efficient processing, collection, and depositing of cash," is the most accurate statement as it includes all three essential steps of cash management: processing, collection, and depositing of cash. The modern approach to cash management requires efficient processing to ensure that cash is tracked and recorded accurately, efficient collection to ensure that cash is received promptly, and efficient depositing to ensure that cash is used productively.