- CFA Exams
- CFA Level I Exam
- Study Session 9. Financial Reporting and Analysis (4)
- Reading 29. Financial Reporting Quality
- Subject 4. Detection of Financial Reporting Quality Issues
CFA Practice Question
Which of the following is the simplest way for a company to increase its reported operating cash flow?
A. Record sales on a bill-and-hold basis
B. Slow down the rate of payment to suppliers
C. Use a third party financial institution to pay suppliers
Explanation: Slowing down the rate of payment to suppliers is the simplest way to increase reported operating cash flow.
User Contributed Comments 4
| User | Comment |
|---|---|
| pveace | Is that really the simplest way? On my point of view it can dramatically affect the operations depending on the environment of the company. In terms of negotiation it might be as easy as option A. |
| D3456 | Maybe a stupid question, but why not C? |
| kingirm | disagree with the answer. a must be the correct one. becuse over b and c the firm has less discetion. on option a the firm is the sole party to decide. so it s the simplest way. |
| bruno5104 | Simplest way for me is still b. |