Which of the following is a cash outflow?
A) a decrease in accounts receivable
B) an increase in accounts receivable
C) an increase in accounts payable
D) a decrease in inventory

Question

Quizplus · Accepted Answer

An increase in accounts receivable indicates that a company has made sales on credit, not receiving cash immediately, thus not representing a cash outflow. However, it does not directly result in cash leaving the company, making the initial statement incorrect. The correct interpretation is that an increase in accounts receivable does not directly relate to cash outflows as it represents sales made on credit. Cash outflow occurs when the company pays out cash, such as when paying off accounts payable or purchasing inventory.

Which of the Following Is a Cash Outflow