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.

---

Definitions:

Residual Value

An asset's expected monetary value at the end of its operational lifespan.

Retired

The status of an individual who has left their professional career, often due to age or reaching financial independence that allows them not to work actively.

Estimated Value

An approximation of the monetary worth of an asset, liability, or a business, determined through analysis or professional judgment.

Fixed Asset

Long-term tangible property owned by a business, used in its operations and not expected to be consumed or converted into cash in the short term.