Which One of the Following Transactions Will Increase the Liquidity

question 2

Multiple Choice

Which one of the following transactions will increase the liquidity of a firm?

• A)Cash purchase of new production equipment
• B)Payment of an account payable
• C)Cash purchase of inventory
• D)Credit sale of inventory at cost
• E)Cash payment of employee wages

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Definitions:

Family Business

A commercial organization in which decision-making is influenced by multiple generations of a family related by blood or marriage.

Guidelines

Recommendations or protocols aimed at steering actions or decisions in a specific direction or towards achieving a desired outcome.

Family Member

An individual who is related to another by birth, adoption, or marriage, and holds a specific familial role such as parent, sibling, or spouse.

Nonfamily Employees

Employees who are not relatives or members of the business owner's family, hired to perform tasks and roles within an organization.