Use the Equation Presented Below to Answer the Question That

question 141

Multiple Choice

Use the equation presented below to answer the question that follows:
Cash = CL + LTL + CS + RE - NCCA - LTA
Where: CL = Current liabilities
LTL = Long-term liabilities
CS = Common stock
RE = Retained earnings
NCCA = Noncash current assets
LTA = Long-term assets
Which of the following activities results in a cash outflow?

• A)Decreases in noncash current assets NCCA)
• B)Decreases in long-term assets LTA)
• C)Increases in long-term liabilities LTL)
• D)Decreases in retained earnings RE)

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Definitions:

Note Receivable

A written promise that one party will pay a specific sum of money to another party at a future date.

Journalize Transactions

The process of recording financial transactions in a company's accounting records or journal.

Dishonored Note

A promissory note that has not been paid by the maker when due, leading to a default.

Interest Revenue

Income earned by an entity for lending its money or letting another entity use its funds.