Which of the Following Could Account for a Firm That

question 90

Multiple Choice

Which of the following could account for a firm that has a negative net income,yet has a positive amount of cash provided by operations?

• A) The net loss was greater than the amount of depreciation expense.
• B) Inventory increased significantly more than accounts payable.
• C) Accounts receivable decreased by significantly more than accounts payable.
• D)Cash balances declined to the desired amount.

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Definitions:

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, which are reinvested into the business.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Stock Dividend

A payment made to shareholders in the form of additional shares in the company, rather than cash.

Cash Dividend

A direct payment of profits made by a company to its shareholders, usually in cash.