Question

A company bought $50,000 of inventory for $20,000 cash, with the balance due to the supplier in 30 days. What is the operating cash flow in this transaction? ($30,000) ($70,000) ($20,000) $0 ($50,000)

Answer 1

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The company only paid $20,000, therefore the remaining $30,000 is classified as an accounts payable.

Therefore, the initial outflow is only $20,000 since the remaining $30,000 (50,000 - 20,000) will be paid as a later date.

Answer 2

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