Which one of the following transactions is a use of cash?
A) Payment to a supplier for a credit purchase.
B) Sale of inventory on credit.
C) Cash sale to a customer.
D) Collection of an account due from a customer.
E) Obtaining a bank loan.

Question

Quizplus · Accepted Answer

Payment to a supplier for a credit purchase is a use of cash because it involves the outflow of cash from the business to settle a liability.

Which One of the Following Transactions Is a Use of Cash