Day: June 12, 2021

When a company is short of liquid funds, for what purpose may the reserves be used? 

Select ONE answer:

1. to finance the take-over of another business the company is anxious to acquire
2. to maintain dividends during periods of low profitability
3. to pay creditors promptly so as to obtain discounts
4. to write down assets whose value to the business has fallen

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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