Which of the following would be considered a use of cash?
A) Accounts receivable increase.
B) Accounts payable increase.
C) Common stock increase.
D) Revenue increase.
E) Net fixed assets decrease by the amount of depreciation.

Question

Quizplus · Accepted Answer

An increase in accounts receivable indicates that a company has made sales on credit, not receiving immediate cash payment, thus not directly increasing its cash position. This is considered a use of cash because it represents revenue that has been earned but not yet received in cash.

Which of the Following Would Be Considered a Use of Cash