What is a common source of cash inflow from business operations?

Prepare for the SACE Stage 2 Accounting Exam. Test your knowledge with flashcards and multiple choice questions, with hints and explanations for each question. Get ready to excel!

Sales revenue is a fundamental source of cash inflow from business operations. This figure represents the income generated from the sale of goods and services to customers, which is the primary objective of most businesses. When a company sells its products or services, it receives cash or accounts receivable, leading to an inflow of cash when payments are received. Sales revenue directly reflects the company's operational effectiveness and is a key indicator of business performance.

In contrast, the other options fail to function as cash inflows from business operations. Utilities expense represents a cost incurred for services used by the business, but it is not a source of cash inflow; rather, it reflects cash outflow. Loan repayment signifies cash outflows as the business pays back borrowed funds, thus reducing cash reserves. Depreciation expense, while important for showing the reduction in value of an asset over time, is a non-cash expense that does not directly impact cash inflows; it reflects accounting entries that affect profitability but not actual cash movement. Therefore, sales revenue is the correct answer as it encompasses the cash generated through the core activities of the business.

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