Question

Which of the following are sources of cash?

1) Bank loans
2) Sale of assets
3) Issuance of stock
4) Payment of accounts payable

Answer 1

Bank loans, sale of assets, and issuance of stock are sources of cash for a firm. The payment of accounts payable is not a source of cash but rather an outflow.

Step-by-step explanation:

The question asks to identify which options are sources of cash for a firm. The correct answers that represent sources of cash for a firm include:

1. Bank loans - Borrowing money from a bank provides immediate cash in exchange for future repayment with interest.
2. Sale of assets - Selling company assets converts physical or intangible assets into cash.
3. Issuance of stock - When a firm issues stock, it is essentially selling ownership in the company in return for cash.

On the other hand, the

payment of accounts payable

is not a source of cash; rather, it is an outflow of cash to settle debts with suppliers or creditors.