Sara's Business Lends £10 000 to One of Its Customers

Multiple Choice

Sara's business lends £10 000 to one of its customers at an annual interest rate of 6%. Which two of the following statements are correct?
A. The annual receipt of interest increases cash.
B. The loan of £10 000 decreases cash in the business.
C. The loan of £10 000 has no effect on the working capital of the business.
D. Capital is decreased by £10 000 when the loan is made.

A) B and C.
B) C and D.
C) A and D.
D) A and B.