Question

Chow Company earned $3,300 of cash revenue, paid $1,900 for cash expenses, and paid a $650 cash dividend to its owners. Which of the following statements is true?

Answer 1

Explanation:

Chow Company earned $3,300 of cash revenue.

Chow Company paid $1,900 for cash expenses.

Chow Company paid a $650 cash dividend to its owners.

To determine the net cash flow, subtract the total cash expenses and dividends from the cash revenue:

Net Cash Flow = Cash Revenue - Cash Expenses - Cash Dividends

Net Cash Flow = $3,300 - $1,900 - $650

Net Cash Flow = $750

The true statement is that Chow Company had a net positive cash flow of $750 after accounting for revenue, expenses, and dividends.