Which of the following represents a source of cash?
A) A decrease in accounts receivable
B) An increase in inventory
C) A decrease in accrued expenses
D) A decrease in accounts payable

Question

Quizplus · Accepted Answer

A decrease in accounts receivable means that the company has received cash from its customers, therefore representing a source of cash. An increase in inventory (B) means that the company has spent cash to purchase additional inventory, representing a use of cash. A decrease in accrued expenses (C) means that the company has paid off its outstanding expenses, representing a use of cash. A decrease in accounts payable (D) means that the company has paid off its outstanding invoices to creditors, representing a use of cash.

Which of the Following Represents a Source of Cash