Aaron Increported Operating Expenses During 2011 of $765,000 (Including $80,000 of of Depreciation

question 95

Multiple Choice

Aaron Inc.reported operating expenses during 2011 of $765,000 (including $80,000 of depreciation expense) .Prepaid expenses increased $25,000 while accrued liabilities increased $43,000.How much cash was paid for operating expenses during 2011?

• A)$702,000
• B)$622,000
• C)$667,000
• D)$703,000

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Definitions:

Trading Costs

Trading costs are the expenses incurred in buying and selling financial instruments, including commissions, spreads, and slippage.

Lockbox System

A service provided by banks to companies for the collection of payments from customers, where the payments are sent directly to a post office box to expedite processing.

Treasury Bills

Treasury bills are short-term government securities with maturities ranging from a few days to 52 weeks, sold at a discount from their face value.

Collection Time

The average period it takes for a company to receive payments owed by its customers after a sale has been made.