Henry Has Received Notice from a Supplier That All Invoices

question 3

Multiple Choice

Henry has received notice from a supplier that all invoices must be paid within 30 days rather than 60 days as previously given. Which of the following will be impacted by this change?

• A) Inventories
• B) Raw materials inventory
• C) Accounts receivable
• D) Capital expenditures
• E) Cash flow

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Definitions:

Discontinued Operations

Parts of a company's business that have been sold or otherwise disposed of, with their financial results reported separately from ongoing operations.

Cost of Goods Sold

The immediate expenses linked to the creation of a company's sold products, encompassing both the costs of materials and labor.

Net Sales

Total revenue from sales of goods or services, less returns, allowances for damaged goods, and discounts.

Operating Expense

Expenses incurred during normal business operations, such as rent, utilities, and payroll, excluding costs associated with the production of goods sold.