Which of the Following Activities Result in an Increase in a Firm's

question 120

Multiple Choice

Which of the following activities result in an increase in a firm's cash?

• A) decrease fixed assets
• B) decrease accounts payable
• C) pay dividends
• D) repurchase of common stock

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Definitions:

Inventory Turnover

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a particular period, indicating the efficiency of inventory management.

Accounts Payable

Accounts payable is an accounting term for the outstanding bills or debts a company owes to suppliers or vendors for goods or services received.

Operating Cycle

The operating cycle is the amount of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from these sales, reflecting the efficiency of a company's operations.

Accounts Receivable Period

The average number of days that a company takes to collect payments from its credit sales.