[amp_mcq option1=”Payment of cash to creditors” option2=”Cash received from debtors” option3=”Cash machine was purchased” option4=”All of the above” correct=”option2″]
The correct answer is: B. Cash received from debtors.
A cash inflow is an increase in cash and cash equivalents. Cash equivalents are short-term, highly liquid investments that are readily convertible to cash.
Cash received from debtors is a cash inflow because it represents money that is owed to the company and has now been collected. This is a positive event for the company because it increases its cash balance.
Payment of cash to creditors is a cash outflow because it represents money that the company owes to its suppliers and has now been paid. This is a negative event for the company because it decreases its cash balance.
Cash machine was purchased is a cash outflow because it represents money that the company has spent on a new asset. This is a negative event for the company because it decreases its cash balance.
Therefore, the only option that represents a cash inflow is B. Cash received from debtors.