An increase in a current asset or long-term liability produces a cash inflow.

Name: An increase in a current asset or long-term liability produces a cash inflow.
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Question

An increase in a current asset or long-term liability produces a cash inflow.​

Quizplus · Accepted Answer

An increase in a current asset (other than cash) typically indicates a use of cash, thus not producing a cash inflow. An increase in a long-term liability, however, does indicate a cash inflow as it usually means the company has borrowed more, increasing its cash reserves.

An Increase in a Current Asset or Long-Term Liability Produces