Which One of the Following Is Representative of Typical Cash

question 197

Multiple Choice

Which one of the following is representative of typical cash flows from operating activities?

• A) Repayment of principals on loans.
• B) Payments by a merchandiser to acquire equity securities of other companies.
• C) Proceeds from the issuance of bonds and notes payable.
• D) Receipts of cash sales.
• E) Proceeds from collecting the principal amounts of loans.

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Definitions:

Recorded When Earned

A principle indicating that revenue should be recognized in the accounting period in which it is earned, regardless of when the cash is received.

Accrued Revenues

Revenues that have been earned by providing goods or services but have not yet been received or recorded.

Cash Receipts

Cash receipts are the records of all cash inflows, representing money received by a business, typically from its operational activities like sales or services.

Accrue Employee Salaries

The process of recognizing the cost of salaries earned by employees but not yet paid to them.