Answer: Delayed collection of accounts receivable

A drag on liquidity occurs when receipts are delayed, thereby reducing the availability of funds. Key factors contributing to this include uncollected receivables, which, if left outstanding for extended periods, increase the risk of non-collection. This contrasts with a pull on liquidity, which arises from premature disbursements or limited trade credit, forcing companies to expend funds before receiving proceeds from sales. Option B correctly identifies uncollected receivables as a drag, while Options A and C describe scenarios more aligned with a pull on liquidity.

Author: LeetQuiz Editorial Team