Accounts payable increased by $100,000 and accounts receivable 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 payable means the company has delayed cash payments, increasing cash flow by $100,000. A decrease in accounts receivable means the company has collected cash, increasing cash flow by $50,000. Together, these changes result in a net cash increase of $150,000.

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