Which of the Following Would Raise a Red Flag About

question 43

Multiple Choice

Which of the following would raise a red flag about the cash-to-cash cycle when reviewing the Statement of Cash Flows?

• A) increase in both accounts receivable and accounts payable
• B) decrease in both accounts receivable and accounts payable
• C) increase in accounts receivable and decrease in accounts payable
• D) stable levels of accounts receivable and accounts payable.

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Definitions:

Local Governments

Administrative bodies in smaller geographical areas within a country that govern at a level below that of the state or federal government.

Expenditures

Expenditures are the expenses incurred by individuals, businesses, or governments in paying for goods and services.

Benefits-received Principle

This principle suggests that individuals should pay taxes in proportion to the benefits they receive from government services.

Taxation

The process by which a government imposes charges on citizens and corporate entities to finance government spending and public services.