Clean Sweep,Inc

question 27

Multiple Choice

Clean Sweep,Inc.started the month of June with $800 worth of cleaning supplies.During the month,Clean Sweep purchased $300 of supplies for cash.At June 30,$200 worth of supplies was unused.How will the company report these events on its statement of cash flows for the month of June?

• A)The statement of cash flows will show cash paid for supplies of $(300).
• B)The statement of cash flows will show supplies expense of $900.
• C)The statement of cash flows will show supplies expense of $200.
• D)This is a trick question.The statement of cash flows will not report anything about any of these events.

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Definitions:

Accounts Receivable

Accounts receivable are the amounts owed to a company by its customers for goods or services delivered but not yet paid for.

Net Sales

Revenue from sales transactions after deducting returns, allowances for damaged or missing goods, and discounts.

Working Capital Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets, indicating liquidity.

Current Liabilities

Short-term financial obligations due within one year or within a company's operating cycle, whichever is longer.