For a merchandising company, the largest operating cash outflow would result from which of the following?
A) payments to suppliers from whom we have purchased inventory on credit
B) payment of interest on notes payable
C) payment of wages and benefits to employees
D) payment of taxes to the various government entities

Question

Quizplus · Accepted Answer

The largest operating cash outflow for a merchandising company would result from payments to suppliers from whom they have purchased inventory on credit. This is because the company would have to make regular payments to their suppliers to continue their operations and maintain their inventory levels. While payments for interest, wages and benefits, and taxes are also significant cash outflows, they do not typically represent the largest operating expense for a merchandising company.

For a Merchandising Company, the Largest Operating Cash Outflow Would