University of Central Florida (UCF) ENT4412 Managing Small Business Finances Final Practice Exam

Delaying accounts receivable would not alleviate cash flow issues because it involves postponing the collection of money that is already owed to the company from its customers. This action would actually worsen cash flow because it means that cash that could be incoming is delayed further, making it more difficult for the company to cover immediate expenses, such as payroll.

In contrast, extending accounts payable involves negotiating for more time to pay suppliers, which helps retain cash in the short term. Selling or leasing assets can provide a quick influx of cash, allowing the company to address urgent financial obligations. Prioritizing or eliminating expenses helps to reduce the cash outflow, thereby improving overall cash flow.