When Cash Is Paid to Suppliers on Account, Which Section

question 19

Multiple Choice

When cash is paid to suppliers on account, which section of the Statement of Cash Flows is affected?

• A) Cash Flow from Operating Activities.
• B) Cash Flow from Investing Activities.
• C) Cash Flow from Financing Activities
• D) There is no effect on the Statement of Cash Flows.

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Definitions:

Warranty Rights

The entitlements a buyer has under a warranty, including repair, replacement, or refund for products that fail to meet the specified standards.

Privity

The direct relationship between parties to a contract, conferring rights and obligations.

Warranties

Legal guarantees provided by the seller regarding the quality or performance of a product or service.

Implied Warranty

An implied warranty is a legal term for the assurances that are not explicitly stated but that the law infers that goods are fit for their intended purpose.