Which of the below is a USE of cash? A) Credit Sales B) Retirement of

Which of the below is a USE of cash?

A) Credit Sales
B) Retirement of debt (paying off loans and bonds)
C) Bank loans
D) Cash sales of equipment or other assets of the company

ANSWER

Answer: B
Explanation: B) 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.