Which of the below is a SOURCE of cash? A) Cash Sales B) Wages and Sa

Which of the below is a SOURCE of cash?

A) Cash Sales
B) Wages and Salaries
C) Rent or Lease payments
D) Dividend payments

ANSWER

Answer: A
Explanation: A) The sources of cash (cash receipts or cash inflow) are: cash sales; payments received on accounts receivables (mainly credit sales); cash sales of equipment or other assets of the company, and funding sources (bank loans, bond sales, and stock sales). The uses of cash (cash expenditures or cash outflow) are: cash purchases (supplies, inventories, etc.); payments made on accounts payable (to suppliers); wages and salaries; rent, lease, or mortgage payments; utility payments (water, electricity, phones, etc.); shipping costs; interest payments; dividend payments; retirement of debt (paying off loans and bonds); and repurchases of stock.