Question: For the following two situations, select the statement that would be most helpful in managing cash in each situation which is consistent witheffective cash management

For the following two situations, select the statement that would be most helpful in managing cash in each situation which is consistent witheffective cash management techniques.

Situation 1: We are encountering acashflow problem, and credit terms cannot be tightened any more. Management did not approve of sellingreceivablesto afactor.

Situation 2: Sales are increasing, but cash inflow is slow, and we need to buyinventory.

-Offer customers shortercredit terms, e.g., 30 instead of 45 days. :Situation 1 or Situation 2?

-Sell receivables to a factor.: Situation 1 or Situation 2?

-Keep inventory quantities down to a level that is adequate for meeting current orders:: Situation 1 or Situation 2?

-Delay payment of liabilities by negotiating longer credit terms from suppliers, e.g., 40 instead of 30 days ::Situation 1 or Situation 2?

-Plan timing of major expenditures.::Situation 1 or Situation 2?

-Invest idle cash.::Situation 1 or Situation 2?

Balance theCashaccount daily after recording all cash transactions, including electronic fund transfers (EFT), and prepare a monthly bank reconciliation statement.::Situation 1 or Situation 2?

Check customers' credit history and references thoroughly before extending credit.::Situation 1 or Situation 2?

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