Which of the Following Transactions Would Not Be a Source

question 60

Multiple Choice

Which of the following transactions would not be a source of cash:

• A) The firm issues $1 million of short-term debt and invests the proceeds in inventory.
• B) A customer pays an outstanding bill.
• C) The firm sells $10 million of marketable securities.
• D) The firm receives $10 million from an insurance company to compensate for flood damage earlier that month.

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Definitions:

Net Income

Net income is the total profit of a business after all expenses, taxes, and deductions have been subtracted from total revenue.

Net Loss

Net loss is when a company's expenses exceed its revenues during a specific period, leading to a negative profit margin.

Rent in Advance

Payment for rent that is made before the rental period begins, usually as a requirement by landlords before tenants occupy the property.

Adjusting Entry

An accounting record created at the closing of an accounting cycle to assign revenues and expenses to the relevant fiscal years.