APICS Certified Supply Chain Professional (CSCP) — Question 530

A company that is effectively managing its cash will have which of the following conditions?

Answer options

• A. Low accounts receivable, low inventory, high accounts payable
• B. High accounts receivable, low inventory, high accounts payable
• C. Low accounts receivable, high inventory, low accounts payable
• D. High accounts receivable, high inventory, low accounts payable

Correct answer: A

Explanation

The correct answer, A, indicates a company is efficiently managing cash by minimizing accounts receivable and inventory while maintaining higher accounts payable, allowing for better cash flow. Options B, C, and D suggest higher accounts receivable or inventory, which can tie up cash and hinder effective cash management.