You own a building supply store.Today you sold construction materials to a contractor for $10,000 that you acquired a week ago for $8,000.You paid for the materials in cash,but you sold them to the contractor on credit,and you expect him to pay his bill in a few months.Based on this information during the week you earned a positive profit but experienced a negative cash flow.

Question

Quizplus · Accepted Answer

The profit earned from the sale of the materials is $2,000 ($10,000 - $8,000). However, since the sale was made on credit, there was no immediate inflow of cash, resulting in a negative cash flow.

You Own a Building Supply Store