If C Co.'s trade receivables balance was $1,666 million in 20X2 and $1,798 million in 20X3, what would be the impact on the statement of cash ﬂows?
A) A decrease in cash ﬂow from investing activities
B) An increase in cash ﬂow from operating activities
C) An increase in cash ﬂow from investing activities
D) A decrease in cash ﬂow from operating activities

Question

Quizplus · Accepted Answer

An increase in trade receivables indicates that more sales are being made on credit rather than cash. This means that less cash is being received in the period, leading to a decrease in cash flow from operating activities.

If C Co's Trade Receivables Balance Was $1,666 Million in 20X2 and 20X2