Question

Abc buys widgets for $5 cash and sells them on account for $8. At the point of sale, what is the effect on the cash flow of abc?.

Answer 1

At the point of sale, there is an increase in the effect on the cash flow of abc.

What is cash flow?

A cash flow is a real or virtual movement of money.

• A cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected to happen in the future, are thus uncertain and therefore need to be forecast with cash flows.
• A cash flow is determined by its time t, nominal amount N, currency CCY and account A; symbolically CF = CF(t,N,CCY,A).
• It is however popular to use cash flow in a less specified sense describing (symbolic) payments into or out of a business, project, or financial product.
• Cash flows are narrowly interconnected with the concepts of value, interest rate and liquidity. A cash flow that shall happen on a future day t(N) can be transformed into a cash flow of the same value in t(0).

To learn more about cash flow: brainly.com/question/10714011

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