A-LevelAccountingAnalysis and communication of accounting information9706/12 · May/June 2012 · Q171 Mark

A business finds that it is unable to pay its trade payables because of a poor cash flow. What should it do to improve its cash flow?

Afactor its trade receivables

Bincrease its trade receivables

Cincrease its inventory

Drepay its overdraft

✓ Correct answer

A: factor its trade receivables

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Topic: Analysis and communication of accounting information, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2012 Paper 1 Variant 2, question 17.

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