Which of the following is not a source of cash?
A) Sale of equipment below book value at a loss
B) Issuance of bonds payable below par value at a discount
C) Declaration of a cash dividend to be paid in the next accounting period
D) Collection of a long-term note receivable from a customer

Question

Quizplus · Accepted Answer

Declaration of a cash dividend to be paid in the next accounting period is not a source of cash as it represents only an intention to pay cash in the future and does not result in any immediate increase in cash. The other options (A, B, and D) all represent sources of cash: A represents a cash inflow from the sale of equipment, B represents a cash inflow from the issuance of bonds at a discount, and D represents a cash inflow from the collection of a long-term note receivable.

Which of the Following Is Not a Source of Cash