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Which of the following practices best illustrates efficient management of cash? The accountant records all cash receipts and payments when reconciling the bank account at

Which of the following practices best illustrates efficient management of cash?

  1. The accountant records all cash receipts and payments when reconciling the bank account at the end of each month.
  2. Management arranges for a loan to cover projected cash shortages during the production phase of the business cycle each year.
  3. Cash budgets (forecasts) are prepared only one month in advance in order to avoid the need for constant revision.
  4. All cash resources are held in the checking account to maximize liquidity.

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