Choice "A" is correct. Borrowing funds on a note in June Year 1 would be a cash inflow in Year 1 and would have to be included in a schedule of cash receipts and disbursements for Year 1. The repayment would be a cash outflow in Year 2.Choice "c" is incorrect. A purchase order is a commitment, but not a cash event.Choice "b" is incorrect. Dividends declared are a non-cash item until paid in Year 2.Choice "d" is incorrect. Uncollectible accounts are a non-cash item.
