If a Firm's Net Income Is Positive and Its Noncash

question 61

Multiple Choice

If a firm's net income is positive and its noncash expenses are positive, which of the following could account for a negative amount of cash provided by operations?

• A)current assets decrease more than current liabilities decrease.
• B)current assets increase more than current liabilities increase.
• C)current assets decrease more than current liabilities increase.
• D)a large addition is made to plant and equipment.

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Definitions:

Cancelling Contract

The legal act of nullifying an agreement, making it legally void and releasing all parties from their obligations under that agreement.

Remedy

in law, signifies the means by which a court of law enforces a right, imposes a penalty, or makes some other court order to impose its will in respect to a particular legal failure or injury.

Seller

An individual or entity that offers goods or services for sale to buyers in exchange for money or other compensation.

Lessor

The party in a lease agreement who owns the asset or property and grants its use to another party for a specific period, under certain conditions.