Which one of the following is a use of cash?
A) Reduction in inventory.
B) Collection of an account receivable.
C) Reduction in accounts payable.
D) Sale of equipment.
E) Tax refund.

Question

Quizplus · Accepted Answer

A use of cash in accounting refers to any transaction that results in a decrease in the company's cash balance. Reduction in accounts payable is a use of cash because it means the company is paying off its debts or obligations, which decreases its cash balance.

Which One of the Following Is a Use of Cash