Which of the following activities affects profit, but has no immediate impact upon cash flows?

Question

Quizplus · Accepted Answer

Making the end-of-period adjustment to record estimated uncollectible accounts affects profit by decreasing it due to the recognition of a loss. However, there is no immediate impact on cash flows because no cash is actually received or paid out at this point.

The other activities listed all involve cash flows. A) Collection of an account receivable increases cash inflows. C) Investing excess cash in securities involves cash outflows for the purchase of the securities. D) Write-off of an uncollectible account receivable against the allowance decreases cash inflows if the allowance for bad debts has already been set up, or increases cash inflows if it has not been set up.

Which of the Following Activities Affects Profit, but Has No