How would a $15,000 decrease in AR and a $8,000 increase in inventory affect cash?
A) $15,000 source; $8,000 use
B) $15,000 use; $8,000 source
C) $7,000 use
D) $23,000 use
E) $23,000 source

Question

Quizplus · Accepted Answer

A decrease in accounts receivable (AR) means that cash is collected, which is a source of cash. An increase in inventory means cash is used to purchase more inventory, which is a use of cash.

How Would a $15,000 Decrease in AR and a $8,000