
Answer-first summary for fast verification
Answer: Reduced credit limits
**Explanation:** - **Option A (Obsolete inventory):** Incorrect. Obsolete inventory is a drag on liquidity, not a pull. It indicates unused inventory that may no longer be usable, which ties up capital without generating cash flow. - **Option B (Reduced credit limits):** Correct. Reduced credit limits are a pull on liquidity. This occurs when suppliers restrict the amount of credit available to a company, often due to late payments, forcing the company to pay out funds before receiving sales proceeds. - **Option C (Uncollected receivables):** Incorrect. Uncollected receivables are a drag on liquidity, as they represent funds tied up in outstanding invoices that may not be collected, increasing bad debt expenses and reducing available cash.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
No comments yet.