Of the following, which one affects cash during a period?
A) The declaration of a cash dividend.
B) The payment of interest expense accrued in a previous accounting period.
C) The declaration of a stock dividend.
D) Writing off an uncollectible account receivable.
E) An adjusting entry recognizing the expiration of prepaid insurance.

Question

Quizplus · Accepted Answer

The payment of interest expense accrued in a previous accounting period affects cash because it involves an actual cash outflow to settle the liability.

Of the Following, Which One Affects Cash During a Period