Which of the following is not a source of cash?
A)Increase in owners' equity
B)Increase in accounts payable
C)Decrease in accounts receivable
D)Increase in inventory

Question

Quizplus · Accepted Answer

An increase in inventory represents an increase in assets and a use of cash, as cash is being used to purchase and hold more inventory. The other options represent sources of cash, as an increase in owners' equity represents an infusion of cash into the business from the owners, an increase in accounts payable represents the ability to delay payments and hold onto cash for a longer period of time, and a decrease in accounts receivable represents the collection of cash from customers who previously owed the business.

Which of the Following Is Not a Source of Cash