For a merchandising company,the largest operating cash outflow would result from which of the following?
A)payments to suppliers from whom we have purchased inventory on credit
B)payment of wages and benefits to employees
C)payment of taxes to the various government entities
D)payment of interest on notes payable

Question

Quizplus · Accepted Answer

The largest operating cash outflow for a merchandising company would result from payments to suppliers from whom inventory has been purchased on credit. This is because inventory is one of the primary assets of the company and is purchased in large quantities, resulting in significant cash outflows. Payment of wages and benefits to employees, payment of taxes to government entities, and payment of interest on notes payable are also significant cash outflows, but typically not as large as payments made to suppliers for inventory.

For a Merchandising Company,the Largest Operating Cash Outflow Would Result