Multiple choice question having difficulty figuring out
A company may earn a profit during an accounting period but have less money in the bank at the end of the period than it had at the beginning. Which of the following on its own could explain this?.
A)an increase in the depreciation charge relative to the previous accounting period
B)an increase in trade debtors over the course of the period
C)the sale of fixed assets during the period
D)no paying invoices received from creditors
I really cants figure out which one is the correct answer to explain the statement... can anyone be generous to help me
Comment on Just Looking's post
I believe the answer is A since it will increase the expenses accounts but will reduced the asset account.. am I correct?
Comment on Just Looking's post
The answer is b bccause increase in debtors are outflows of cash and if in case it had doubtful dates it was added to the operating profit to increase the adjusted profit... im I correct?
Comment on Just Looking's post
Ohh okay thanks yes I understand clearly thanks so much just looking