Which of the Following Would Cause a Decrease in Cash

question 104

Multiple Choice

Which of the following would cause a decrease in cash?

• A)An increase in the Average Collection Period from 15 days to 30 days
• B)Selling off fixed assets for more than book value
• C)An increase in accrued salaries expense
• D)Paying suppliers in 60 days versus 45 days

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Definitions:

Asset

Resources owned or controlled by a company, expected to provide future economic value or benefits.

Owner's Capital

The amount of money and other assets owned by a business's owner after all liabilities have been deducted; also known as owner's equity.

Accounts Receivable

Amounts due from clients to a business for goods or services that have been supplied or rendered but haven't been settled.

Accounts Payable

Amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.