Safety Cushion
Daily Operations
Purchase of Assets
Payment of Dividends
Answer is Right!
Answer is Wrong!
The correct answer is: B. Daily Operations
The transaction motive is the need to hold cash to meet the day-to-day expenses of running a business. This includes things like paying for supplies, salaries, and bills.
The other options are incorrect because:
- A. Safety Cushion is the need to hold cash to protect against unexpected expenses or losses.
- C. Purchase of Assets is the need to hold cash to buy new assets, such as equipment or property.
- D. Payment of Dividends is the need to hold cash to pay out dividends to shareholders.
I hope this helps! Let me know if you have any other questions.