An entity can have a loss for the year but still experience an increase in its cash. Which of the following is most likely to cause this to happen?

Question

Quizplus · Accepted Answer

The shortening of credit given to trade receivables means that customers are required to pay more quickly. This can lead to an increase in cash inflows without necessarily improving the entity's profitability, thus allowing for an increase in cash even if the entity reports a loss for the year.

An Entity Can Have a Loss for the Year but Still