Which of the Following Activities Affects Profit, but Has No

question 99

Multiple Choice

Which of the following activities affects profit, but has no immediate impact upon cash flows?

• A) Collection of an account receivable.
• B) Making the end-of-period adjustment to record estimated uncollectible accounts.
• C) Investing excess cash in investments in securities.
• D) Write-off of an uncollectible account receivable against the allowance.

---

Definitions:

Book Income

The income reported by a company in its financial statements, calculated based on accounting rules rather than tax regulations.

Taxable Income

The portion of an individual's or company's income that is subject to taxes according to government regulations.

Income Measurement

The process of determining the monetary amount of the income earned by a business during a specific period.

Constructive Receipt

A tax principle stating that income is considered received by the taxpayer once it is credited to their account or made available without restriction.