Ace the 2025 CGFM Exam – Turbocharge Your Path to Financial Mastery!

A cash management policy should include a determination of when checks are considered stale dated because this is crucial for effective financial control and risk management. Stale-dated checks are typically those that have not been cashed within a specified period, often six months from the issue date. By establishing guidelines on when checks become stale dated, an organization can better manage its cash flow, reconcile its accounts more accurately, and prevent potential losses or fraudulent activities associated with longstanding outstanding checks. Understanding this timeframe aids in maintaining updated records, thereby enhancing the overall accuracy of financial reporting and ensuring compliance with legal and regulatory requirements.

The other choices may relate to cash management but do not specifically address the importance of recognizing stale-dated checks. Establishing a minimum waiting period, identifying a maximum amount for outstanding checks, or limiting the number of checks issued does not focus on the implications for checks that are not cashed in a timely manner or how that affects the management of available funds. Recognizing stale-dated checks is essential for maintaining accurate financial statements and managing resources effectively.