Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash expenditures have exceeded his cash receipts. Oh! Canada is suffering from a(n) ________ problem

Question

Quizplus · Accepted Answer

Cash flow problem refers to the situation when a business spends more cash than it receives, which is precisely the scenario faced by Carlos and his company. Option A is incorrect because an accounting problem pertains to issues with recording or reporting financial transactions. Option B, undercapitalization, refers to a scenario where a company has insufficient financial resources to carry out its operations, but no information is given about the capital structure of the company. Option D, exchange rate problem, pertains to problems arising from fluctuations in foreign exchange rates, which is not mentioned in the scenario.

Carlos Is the Manager of Oh! Canada Sporting Goods