Question

Ezra is the manager of Outdoor Adventure Sporting Goods.During the past six months, his cash expenditures have exceeded his cash receipts.Outdoor Adventure is suffering from a(n) ________ problem.

a.under-capitalization
b.exchange rate
c.accounting
d.cash flow

Answer 1

Answer: (D) Cash flow

Step-by-step explanation:

The cash flow problem is refers top the situation where the organization are not able to paying the cash for its liabilities and the main causes of the cash flow problem are as follows:

• The losses in the company
• Due to the low profit
• Due to the over investment in the capacity

We can also solve the various types of cash flow problems by improving the invoicing process and also by controlling or reducing the expenses in an organization.

Therefore, Option (D) is correct.