What Happens to a Firm Whose Uses of Cash Exceed

question 71

Multiple Choice

What happens to a firm whose uses of cash exceed its sources of cash during an accounting period?

• A) It has a loss of net working capital.
• B) It declares a net loss on the income statement.
• C) It experiences a decrease in sales.
• D) It experiences a decrease in its cash balance.

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Definitions:

Probabilities

The measure of the likelihood that an event will occur, often quantified as a number between 0 and 1.

Simple Events

An event in probability that consists of only one outcome or occurrence and cannot be broken down further.

Probabilities

The likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.

Sales

The exchange of a commodity for money; the action of selling something.