Which One of the Following Is a Source of Cash

question 27

Multiple Choice

Which one of the following is a source of cash?

• A) decrease in accounts receivable
• B) decrease in common stock
• C) decrease in long-term debt
• D) decrease in accounts payable
• E) increase in inventory

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Definitions:

Generally Accepted Accounting Principles

A set of rules and standards for financial reporting that companies in the U.S. must adhere to.

Gross Profit

The financial gain made after deducting the cost of goods sold from total revenue.

Variance

The difference between planned or budgeted amounts and the actual amounts incurred, used for performance evaluation and control.

Actual Costs

The true expenses incurred in the production of a product or the provision of a service, as opposed to estimated or budgeted costs.