Accounts receivable increased by $100,000 and accounts payable decreased by $50,000.What will be the net result in terms of cash flow?
A) Cash increased by $50,000.
B) Cash decreased by $50,000.
C) Cash increased by $150,000.
D) Cash decreased by $150,000.

Question

Quizplus · Accepted Answer

An increase in accounts receivable indicates that sales were made on credit, reducing cash flow by $100,000. A decrease in accounts payable means that cash was used to pay off liabilities, reducing cash flow by $50,000. The net result is a decrease in cash flow by $150,000.

Accounts Receivable Increased by $100,000 and Accounts Payable Decreased by $50,000.What