Which of the following would decrease net cash provided by operating activities?
A) increase in accounts payable.
B) depreciation expense.
C) increase in inventory.
D) loss on sale of equipment.

Question

Quizplus · Accepted Answer

An increase in inventory represents an outflow of cash (to purchase the inventory), which would decrease net cash provided by operating activities. Depreciation expense is a non-cash charge and does not affect cash flow. Increases in accounts payable indicate that a company is taking longer to pay its bills, which conserves cash. A loss on the sale of equipment is considered an investing activity, not an operating activity.

Which of the Following Would Decrease Net Cash Provided by Operating