Other Things Held Constant, Which of the Following Alternatives Would

question 74

Multiple Choice

Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?

• A) Increase the number of years over which fixed assets are depreciated for tax purposes.
• B) Pay down the accounts payables.
• C) Reduce the days' sales outstanding (DSO) without affecting sales or
• Operating costs.
• D) Pay workers more frequently to decrease the accrued wages balance.
• E) Reduce the inventory turnover ratio without affecting sales or operating costs.

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Definitions:

Financial Statements

Formal records that detail the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Proposed Transactions

Potential future financial activities or deals that are being considered but have not yet been executed or finalized.

Interim Statements

Financial reports prepared and presented for periods shorter than a fiscal year, such as quarterly or monthly financial statements.

Prepaid Rent

An expense account that represents rent payments made in advance of the rental period, treated as an asset on the balance sheet until the period to which it relates passes.