Which of the Following Is Not Normally a Characteristic of a Profit

question 35

Multiple Choice

Which of the following is not normally a characteristic of a profit rich, cash poor company?

• A) Low inventory turnover.
• B) High accounts receivable turnover.
• C) High operating income, but low cash flow from operations.
• D) A long operating cycle.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life to date.

Original Cost

The initial price paid to acquire an asset before any depreciation or amortization.

Net Income

The earnings a company retains following the deduction of all costs and taxes from its overall income.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use, subtracted from its original cost on the balance sheet.