Use the table for the question(s)below.
AOS Industries Statement of Cash Flows for 2015

-Consider the above statement of cash flows.Which of the following is TRUE of AOS Industries' operating cash flows?
A)It collected more cash from its customers than they charged.
B)It sold more inventory than it bought.
C)It charged more on its accounts payable than it paid back.
D)It charged less on its accounts payable than it paid back.
E)It used $1.4 million of its cash on depreciation and amortization.

Question

Use the table for the question(s)below.
AOS Industries Statement of Cash Flows for 2015
 
-Consider the above statement of cash flows.Which of the following is TRUE of AOS Industries' operating cash flows?
A)It collected more cash from its customers than they charged. 
B)It sold more inventory than it bought. 
C)It charged more on its accounts payable than it paid back. 
D)It charged less on its accounts payable than it paid back. 
E)It used $1.4 million of its cash on depreciation and amortization.

Quizplus · Accepted Answer

Depreciation and amortization are non-cash expenses, so they do not use cash. The statement about charging more on accounts payable than paying back implies an increase in accounts payable, which is a source of cash in operating activities, making it a true statement about operating cash flows.

Use the Table for the Question(s)below