The management of a company wishes to window-dress its cash flow from operations. Which of the following will improve cash flow from operations?

I. Factoring accounts receivable
II. Paying suppliers more quickly
III. Selling of some excess marketable securities
IV. Deferring payment of taxes

A)IV only
B)III and IV
C)II, III, and IV
D)I and IV

Question

The management of a company wishes to window-dress its cash flow from operations. Which of the following will improve cash flow from operations?

I. Factoring accounts receivable
II. Paying suppliers more quickly
III. Selling of some excess marketable securities
IV. Deferring payment of taxes

A)IV only
B)III and IV
C)II, III, and IV
D)I and IV

Quizplus · Accepted Answer

Factoring accounts receivable and paying suppliers more quickly both have an effect on cash flow from operations, but they are not considered window-dressing techniques. Selling excess marketable securities and deferring payment of taxes, on the other hand, are both techniques used to improve cash flow from operations and can be considered window-dressing techniques. Therefore, options III and IV are the correct choices.

The Management of a Company Wishes to Window-Dress Its Cash