Which of the Following Is a Cash Flow That Might

question 51

Multiple Choice

Which of the following is a cash flow that might occur when new equipment is purchased?

• A)Cash outflow in the form of cash payments
• B)Cash inflow in the form of cost savings
• C)Both a cash outflow in the form of cash payments and a cash inflow in the form of cost savings
• D)Neither a cash outflow in the form of cash payments nor a cash inflow in the form of cost savings

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Definitions:

Accrued Interest

Interest that has been incurred but not yet paid.

Semiannual Interest

Interest calculated or paid twice a year, commonly associated with bonds or loan agreements.

Interest Receivable

Interest Receivable is the amount of interest income that has been earned but not yet received in cash, representing an asset on the balance sheet.

Accrued Interest

Interest that has been incurred but not yet paid, typically recorded in financial statements to recognize expenses in the period they occur.