Select the statement that is not true.
A) A bank overdraft is an example of a 'cash equivalent'.
B) Cash is the pre-eminent asset as it is the medium with which claims are normally settled.
C) The concept of cash underpinning the cash flow statement is 'cash and cash equivalents'.
D) If a firm is operating profitably, it will automatically have plenty of cash.

Question

Quizplus · Accepted Answer

Operating profit does not necessarily mean that the firm has plenty of cash, as cash outflows for various purposes such as investing activities, repayment of loans, and dividends may occur.

Select the Statement That Is Not True