Accounting Multiple Choice Question – 5 October 2025

Which ONE of the following options are a sign of overtrading?

Select ONE answer:

1. Inventory decreasing
2. Payables decreasing
3. Cash decreasing
4. Receivables increasing

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => Cash would be decreasing in a situation of overtrading, as cash flows out to fund the increases in working capital.
4. Not correct

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