Which of the Following Does Not Decrease the Cash Flow

question 75

Multiple Choice

Which of the following does not decrease the cash flow from operating activities?

• A) The prepayment of an expense.
• B) The purchase of operating equipment.
• C) The payment of interest.
• D) All three decrease cash from operating activities.

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Definitions:

Cost Center

A division or unit within an organization that does not directly add to profit but still incurs costs, often analyzed for budgeting and cost control.

Profit Center

A branch or division of a company that is directly responsible for generating its own revenue and profits.

Cost Of Goods Sold

Direct expenditures involved in producing the products a company sells, inclusive of materials and labor.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.